What is loan stacking — and why does it trap otherwise decent UK businesses?

Loan stacking is what happens when a business takes a second expensive short-term facility to service the first, then a third to service the second, until a large share of turnover is leaving the account as interest and fees.

It usually starts as a cashflow gap, not as a bad business. Revenue is real. Timing is not. A slick, often unregulated introducer sells "quick money". The repayment is steep, so the next product is sold to keep the first one current. Before long the director is running the business to feed the stack.

Strata was built for that file: not another short-term product, a rebuild into one structure the cashflow can actually carry — after HMRC is made current enough that a proper lender will look at it.

Signs you are in a stack

• Several unsecured or merchant-style facilities, all with different end dates
• New money arriving mainly to pay old money
• Mainstream bank already said no
• HMRC is chasing at the same time
• You could describe the repayments more easily than you could describe the original purpose of each loan

The on-site refinance calculator is there to put a single longer term next to the current combined outgoing. It is an illustration, not an offer.