Many merchants who ask for funding already have an advance. Understanding positions helps you place the file, and keeps you honest with the merchant.
What a position is
The first advance a merchant takes is first position. A new advance while the first is open is second position, and so on. Each additional advance adds another remittance coming out of the same account.
Why it matters to funders
Later positions carry more risk, because more of the merchant's cash is already committed. Fewer funders write them, and terms reflect the risk.
Talk about it honestly
Ask about open advances on the first call and check statements for recurring debits. A merchant who hides an existing advance creates problems for everyone later.
Watch the merchant's cash flow
Adding remittances can squeeze a business. Good brokers look at whether the merchant can carry the payments, not just whether a funder will write it.
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