Can I take a second cash advance while the first is still running?
Sterling's answer You can, but a second advance is usually dearer than the first and it comes out of the same bank account. If the first one is why you're short, a second one tends to make the hole deeper, not shallower.
Want a straight answer for your business?
See who'll fund meYes, you can take a second advance, and some providers will look at "second position" deals. But your first contract may restrict it, the second is usually priced higher because the provider is behind someone else in the queue, and both payments come out of the same deposits. Check the contract, then check the arithmetic.
What your first contract may say
Read three parts of your existing agreement before talking to anyone new.
- Further financing clause. Some contracts forbid selling the same future receivables to someone else, or require consent. Breaking that can be an event of default.
- Default remedies. What the first provider can do if it says you've defaulted: demand the full balance, enforce a personal guarantee, or rely on a confession of judgment.
- UCC filing. If the first provider filed a UCC-1 against your receivables, a new provider will see it and price that in.
The worked number
You took $50,000 at a 1.35 factor over 6 months, paid daily: $535.71 a day. Your deposits are $80,000 a month. Now you're offered $30,000 at a 1.40 factor over 6 months, paid daily: $42,000 back in 126 payments of $333.33.
| Daily payment | Monthly (21 days) | Share of $80,000 deposits | |
|---|---|---|---|
| First advance | $535.71 | $11,250 | about 14% |
| Second advance | $333.33 | $7,000 | about 9% |
| Together | $869.05 | $18,250 | about 23% |
The second advance costs about 142% APR on its own, against about 126% for the first. And you now hand nearly a quarter of every dollar in to two providers before payroll, rent or stock.
Sterling's take: if 23% of your deposits wasn't affordable before, borrowing the shortfall doesn't make it affordable now.
When a second advance can make sense
- The first advance is nearly paid off and the second funds something that pays back quickly, like stock already sold.
- Your margin comfortably covers both payments in a slow month, not just an average one.
- The first contract allows it, in writing.
When to look at something else
- You need the second advance to cover the first one's payments. That is the start of a spiral.
- The combined payments would take more than your margin in a quiet month.
- You'd be on your third or fourth position.
In those cases, a refinance that pays off the existing advance with one longer, cheaper facility usually beats adding another layer. So can talking to the first provider about a reconciliation if sales have dropped.
What to do next
- Get the payoff balance on your current advance.
- Put both offers into the offer checker and look at the combined monthly payment against your deposits.
- Compare that with a single refinance at a longer term.
- If you're unsure your first contract allows a second advance, ask the first provider in writing before you sign anything.
Run your own numbers: Am I being overcharged?
Estimated APR
82.0%
Expensive short-term money.
50% to 100% APR. Worth it only if the money earns more than it costs, quickly. Ask what a longer term would cost.
- You actually receive
- $97,000
- Cost of the money
- $33,000
- Cost per $1 received
- $0.34
- Factor rate equivalent
- 1.300
- 189 payments of
- $687.83
- Daily debits come out on quiet days too. Check a slow week still covers them.
- Ask in writing whether paying early reduces the total. With many advances it doesn't.
The verdict bands are Sterling's rule of thumb, not market averages.
Ready for a straight answer?
Two minutes of questions. One funding specialist. No impact on your credit score.
Questions owners ask
What is stacking?
Stacking means taking a second (or third) advance while an earlier one is still being repaid, so two or more providers collect from the same sales.
Can my first contract stop me taking a second advance?
It can. Advance contracts can include a clause restricting further financing against the same receivables, and breaching it can count as a default. Read yours before you sign anything new.
Will a second provider know about my first advance?
Almost certainly. The payments show on your bank statements, and the first provider may have filed a UCC-1 against your receivables.
Does Ask Sterling's funding partner work with businesses that have advances running?
Our funding partner's main programs look for two or fewer advances or loans running. Beyond that, a refinance conversation is usually more useful than a new advance.