At American Finance Solutions we have never condoned the practice of “stacking” merchant cash advances or short-term working capital loans. This leads to a business owner paying two advances at the same time severely compromising cash flow and too often leading to default. Finally someone in the know has published the results of the practice reporting that the failure rate of business who do “stack” is above 75%! Unscrupulous finance companies have geared their underwriting practices to maximize their return by “stacking” their contracts with repayment terms generally 4 months or less to limit risk while charging rate 1.5 to twice the market rate. They really don’t care if you stay in business, all they care about is getting paid.
We strongly encourage our clients, competitors & sales partners to discourage “stacking” and follow the North American Merchant Advance Association’s guidelines prohibiting the practice. Focusing on a long-term client relationship that keeps them in business is good for your business building a solid client base that comes back again and again & keeping default rates low.
By providing solid financing contracts to our clients American Finance Solutions has been able to build one of the most reputable brands in our market segment with an average client receiving financing 7.3 times over a three year period.