Stacking Detection
Stacking detection is the underwriting practice of identifying merchants with existing MCA positions through bank statement analysis — looking for recurring daily/weekly ACH debits matching MCA payment patterns — critical for risk assessment and pricing on follow-on advances.
Why This Matters
Stacking detection separates compliant merchants from over-leveraged ones. Bank statements reveal existing MCA payments through patterns: small recurring daily ACH debits (often $200-$1,500), weekday-only timing, and round-number amounts. Sophisticated stacking detection tools (sometimes called 'MCA fingerprinting') match payment patterns against known funder ACH descriptors to identify specific funders and estimate position sizes. Mainstream funders typically decline merchants with 3+ existing positions, while specialty consolidation funders specifically target 4-6 position merchants for reverse consolidation programs.
Frequently Asked Questions
Frequently Asked Questions
How do underwriters detect stacking from bank statements?
Pattern recognition: small recurring daily ACH debits (typically $100-$2,000), weekday-only payment timing, round-number debit amounts, and matching of ACH descriptor strings against known funder transaction patterns. Modern tools automate this analysis for large statement volumes.
What's the maximum stacking position for MCA approval?
Mainstream funders typically cap at 2-3 existing positions. Beyond 3 positions, decline rates approach 100% in standard programs. Specialty consolidation funders specifically target 4-6 position merchants for reverse consolidation refinancing. Position counting is a key underwriting input.