Stips

What are stips?

Stips are the lender's list of what it still needs after saying yes. Some are documents: a voided check, a driver's license, the most recent bank statement. Some are actions: pay off an old advance, get a landlord to sign a waiver, terminate a stale UCC lien. Some are proofs: insurance naming the lender, a signed lease, proof of ownership.

The word comes from cash advance and online lending, where approvals are fast and the stip list is how the lender confirms what its model assumed. Banks call the same thing closing conditions. Either way, nothing funds until the stips are satisfied. Our document checklist covers most of them ahead of time.

How are stips used?

Stips arrive with the approval and must be cleared before funding. A typical list for a $60,000 online term loan approved on a Monday looks like this.

• Most recent month to date bank statement, downloaded from the bank, not a screenshot.
• Voided business check or bank letter confirming the deposit account.
• Government photo ID for each owner signing the guarantee.
• Proof of ownership, such as articles of organization or the operating agreement.
• Payoff letter for the existing advance, which the lender pays directly at funding.
• Signed loan agreement and ACH authorization.

Send all six on Monday afternoon and funding is typically Tuesday or Wednesday. If the payoff letter takes a week, funding waits a week. The list is the timeline.

What do lenders consider normal?

Four to eight stips is typical on online loans and cash advances. Bank and SBA loans carry longer lists, often 10 to 20 closing conditions including appraisals, insurance and updated financials, which is one reason they take longer. See how long a business loan takes for timelines by product.

It is normal for a lender to add a stip after seeing something new, like an unexplained deposit, and to ask for a verbal confirmation call. It is not normal to be asked for money to clear a stip, other than paying off a debt that is part of the deal, or for your online banking password.

What should you watch for?

Watch for stips that change the deal. A payoff stip on an advance you wanted to keep, or a requirement to switch card processors, changes the economics. Read each one and ask why it is there.

Watch for scope creep after approval: if the list keeps growing, ask the lender to confirm in writing that the current list is final. Watch the clock too, since approvals and bank statements both go stale after about 30 days, so a slow stip can mean refreshing the whole file. And never send documents to a third party offering to help clear stips; send them to the lender through its own portal.

Related terms

Stips are what underwriting leaves open and what a term sheet lists as conditions, and clearing a UCC lien is one of the most common. You will hear the word most on merchant cash advances and short term loans, where speed is the whole point. You can apply here, or ask your AI assistant to gather your documents before you apply so the stip list is short, through our MCP server.