Spotting existing positions on bank statements

• PositionsA position is one open cash advance on a merchant's account, numbered in the order taken: first position, second position and so on.
• StackingStacking means a merchant takes more than one cash advance at the same time, so several funders debit the same bank account and the combined holdback climbs.

Every existing advance takes a share of revenue before a new funder sees a dollar. Funders limit how many positions they will sit behind and how much combined holdback they accept. An undisclosed position found by the underwriter usually kills the deal outright, because it tells the funder the file cannot be trusted, and it can come up later as a default if the merchant cannot carry both payments.

• A recurring debit of the same amount. Daily debits appear every business day (about 21 a month); weekly ones on the same weekday each week.
• A funder-style descriptor. Words like CAPITAL, FUNDING, ADVANCE, FINANCIAL or BUSINESS FUNDING in an ACH debit, or a generic "ACH DEBIT" plus a company ID that repeats. Descriptors are often shortened or use a servicer's name rather than the funder's.
• A funding credit before it starts. A large one-off credit from a similar name, usually a few days to two weeks before the first debit. It is the advance, net of fees.
• Payments that change or stop. A debit that drops in size may be a modified position; one that stops may be paid off, renewed or in default. Ask which.

Leave out ordinary recurring debits: rent, loan payments to a bank, equipment leases, payroll services, card-processing fees. A bank term loan still matters to affordability, but it is not an advance position and funders treat it differently.

A trucking company's statements show these debits (names made up):

Against true revenue of $95,000 a month, the existing holdback is 14,127 / 95,000 = 14.9% before any new advance. Whether there is room for another payment depends on each funder's limit on combined holdback and position count.

Estimating what is left on a position

On May 30 the statement shows a $23,750 credit from XYZ FUNDING LLC. If the funder took a 5% fee, the advance was 23,750 / 0.95 = $25,000. At a typical factor of, say, 1.35, the payback would be $33,750, or about 25 weekly payments of $1,375.

advance       = 23,750 / 0.95 = 25,000      (assumes a 5% fee)
payback       = 25,000 x 1.35 = 33,750      (assumes a 1.35 factor)
paid so far   = 12 payments x 1,375 = 16,500
est. balance  = 33,750 - 16,500 = 17,250

That estimate tells you roughly where things stand. The real number comes from the merchant's contract or a payoff letter from the funder, and you need the letter anyway if the new advance will pay the position off.

Ask every merchant directly on the first call: "Do you have any advances or loans right now, and who are they with?" Then check the statements against the answer. If you find a position the merchant did not mention, raise it before you submit. Funders also check UCC filings and industry databases, so a position hidden from you is rarely hidden from them.

Record each position on the merchant under Existing positions with Add position: the Funder, Payment, Frequency, Est. balance and, if known, Funded amount and Started. Switch on Pay off with the new advance for a position a consolidation will clear. The list shows the active count, the monthly total and the estimated balance.

The deal's statement summary uses those positions for holdback and Room for new payment, and lender matching checks position limits. Automatic detection of positions from statement transactions is Coming soon. Try the math with the free stacking calculator.