What Is Cash Advance Stacking?
Cash advance stacking occurs when an applicant already has one or more outstanding advances and takes on additional ones from other providers. In MCA and small business lending, this creates heavy repayment schedules that can quickly overwhelm cash flow.
Stacking typically appears in bank statement reviews where recurring payments to several different funders are visible. Operators use it to assess whether the applicant is already overleveraged and likely to default if more funding is approved.
How Does Cash Advance Stacking Work?
Cash advance stacking is identified by analyzing repayment flows in bank statements.
- Transaction parsing: Outgoing payments to multiple MCA providers are scanned and extracted.
- Pattern recognition: Repayments to different companies on overlapping schedules are detected.
- Burden calculation: The total repayment amount is compared to incoming revenue.
- Risk flagging: Applicants with multiple concurrent obligations are flagged as stacking cases.
Heron automates cash advance stacking detection inside its scrubbing workflow.
- Automated parsing: Transactions are ingested from bank statements through intake.
- Stacking detection: Heron identifies multiple repayment flows and categorizes them as layered advances.
- Structured outputs: Results such as repayment frequency, lender names, and repayment totals are written into CRM fields.
- Next action: Submissions with stacked advances are routed to exception review or declined if they exceed appetite thresholds.
This gives underwriters a clear and instant view of stacking risks without manual inspection.
Why Is Cash Advance Stacking Important?
For brokers and funders, cash advance stacking is one of the strongest red flags in underwriting. Businesses carrying layered obligations may appear stable but are actually stretched too thin to handle additional repayment.
By automating detection, Heron makes sure stacking risks are flagged consistently across all submissions. This protects funders from losses, speeds up decision-making, and enforces appetite rules reliably.
Common Use Cases
Cash advance stacking detection is used across deal flow checks.
- Flagging applicants making repayments to multiple advance providers.
- Identifying repayment schedules that overlap and strain cash flow.
- Writing stacking details into CRM records for underwriting visibility.
- Screening out deals where stacked repayment loads exceed thresholds.
- Escalating stacking cases to exception queues for further judgment.
FAQs About Cash Advance Stacking
How does Heron detect cash advance stacking?
Heron scrubs bank statements, detects recurring repayment flows to multiple MCA providers, and records them as stacking risks in the CRM.
Why is cash advance stacking risky for MCA brokers and funders?
Stacking puts heavy repayment pressure on applicants, increasing default risk. It also complicates collections when multiple funders compete for repayment.
What outputs should teams expect from cash advance stacking detection?
Teams receive structured CRM fields with repayment counts, amounts, and notes on overlapping obligations, giving underwriters a complete view of stacking exposure.