Loan stacking is when a borrower has multiple business loans outstanding at the same time. In this case, you’re not refinancing one loan with another but taking out multiple loans at once—hence, stacking them.

Having multiple loans at the same time can negatively impact your ability to afford the loan payments. If you stop making the required payments to pay off your loan it can add pressure to your business’s cash flow and you might be violating the terms of your first loan agreement, which makes it difficult for you to receive additional funding down the road.