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Position
Also called first position, second position, third position, stack position.
Where a funder sits in the order of advances or liens against the same business - first position funded first, with each later position layered on top of the existing debits.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
In advance-world usage, position means the order in which advances were funded and are being collected. A business with three live advances is described as being in third position when it takes a fourth. Each additional position claims another slice of the same daily deposits, so pricing rises and terms shorten as position deepens: a later funder is collecting behind others and has less cash flow to reach.
Most advance agreements prohibit taking additional positions without consent. Taking one anyway - stacking - is an event of default under the earlier agreements even if the earlier funders never notice, and it is a listed breach under most performance guarantees.
The legal sense is different. Lien priority under Article 9 generally runs first to file, not first to fund. A funder that funded third but filed first can hold senior priority in the collateral over funders that funded earlier and filed late or not at all. The two orderings are frequently not the same.
Where this one catches people
Worked through
Illustration. Deposits average $120,000 a month, roughly $5,700 per banking day. Position one debits $900 a day. Position two adds $700. Position three adds $600.
Combined daily collection is $2,200 against $5,700 of deposits - about 39% of every dollar received, before payroll, rent, inventory or taxes. A fourth position at $500 takes it to $2,700, or 47%. This is the arithmetic behind why deep-stack files default: nothing in any single agreement looks unreasonable, and the sum is not survivable.
Figures in the example are illustrative. They show the arithmetic, not a quote — what any one lender would charge is on that lender's page, where it is published at all.
Where you will meet this term
Read next
Position — common questions
What does position mean?
Where a funder sits in the order of advances or liens against the same business - first position funded first, with each later position layered on top of the existing debits.
Where does position catch people out?
Commercial position and legal priority are different things and people use one word for both. A third-position funder may hold the first-filed UCC. When someone says 'we're in first', ask whether they mean funded first or filed first - the answer changes who gets paid in an enforcement.
Is position the same as an interest rate?
Position is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does position apply to?
Merchant Cash Advance, Working Capital.
Is there a worked example of position?
Yes, on this page, and it is labelled illustrative. It shows the arithmetic, not a quote from any lender.
What else should I read alongside position?
Consolidation, Event of default, Paper grade, Perfection, Reverse consolidation.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.