As a business owner, cash flow is often the lifeblood of your operations. Whether you’re stocking up for peak trading periods, investing in growth, or navigating unexpected dips, quick access to funding can be a game-changer. But in the rush to stay afloat or scale up, many entrepreneurs fall into a dangerous trap known as loan stacking—and they may not even realise it.

At WAPPoint, in partnership with Merchant Capital, we’re passionate about helping South African businesses grow sustainably. That means making sure you understand the risks involved in financial decisions—especially when it comes to stacking loans.

What is Loan Stacking?

Loan stacking happens when a business takes out multiple loans from different lenders at the same time, without fully disclosing the existing debt. While this might seem like a clever way to boost available capital, it can spiral out of control quickly.

Most lenders offer funding based on your ability to repay. When you take out a second or third loan without the others knowing, you dilute your repayment capacity—creating risk not just for the lender, but for your business too.

Why It’s Risky

1. It Hurts Your Cash Flow
Each loan comes with its own repayment terms. When repayments start piling up, your day-to-day operating capital takes a hit. Suddenly, what felt like a lifeline becomes a financial burden that squeezes your business dry.

2. It Damages Trust With Lenders
Transparency is key in any lending relationship. When lenders discover other undisclosed debts, it can damage your credibility. This might limit your future access to funding—or worse, result in breaches of contract.

3. Higher Risk of Default
More loans mean more financial pressure. If one repayment is missed, it can trigger penalties, credit score damage, or even legal action. A snowball effect of defaults can put your entire business at risk.

4. It Affects Your Business Credit Score
Your credit score reflects your business’s financial health. Loan stacking often leads to overextension, late payments, and higher credit utilisation—all of which negatively impact your score and long-term borrowing power.

A Smarter Alternative: Transparent, Responsible Funding

At WAPPoint, we don’t believe in short-term fixes that lead to long-term problems. That’s why we’ve partnered with Merchant Capital—to offer tailored business funding that is transparent, flexible, and manageable.

We work with you to understand your business needs and ensure that your funding is structured in a way that supports your cash flow, not strains it. When your business grows sustainably, we grow with you.

Need Funding the Right Way?

If you’re considering business funding, avoid the temptation to stack loans. Rather speak to our team about a customised funding solution that fits your unique business journey.

Let’s build your business the smart way—together.

Want to apply for funding from a trusted partner? click here