CrediArc executive briefing
SMB Lending Fraud & KYB: A Pre-Underwriting Checklist
Entity, ownership, bank, invoice, and document checks that should happen before a credit analyst spends time on the file.
What this page covers
Credit analysis asks whether a real business can repay. Fraud controls first ask whether the business, people, documents, accounts, and transactions are what they claim to be.
Combining the two too early wastes underwriter time and can allow persuasive financial narratives to distract from basic inconsistencies.
Verify the entity and control structure
Match legal name, registration number, address, status, officers, beneficial owners, tax identifiers, and operating history across authoritative records and the application.
Entity active and in good standing
Ownership and signer authority consistent
Address and contact channels independently verified
Related companies and prior entities identified
Verify the money path
Confirm that the operating account belongs to the applicant, deposits match the claimed business, and outgoing payments do not reveal undisclosed lenders. For invoice-backed facilities, validate seller, buyer, delivery, and payment instructions.
Test documents for internal consistency
Compare periods, opening balances, fonts, formulas, metadata, account numbers, and totals across statements. Automation can flag anomalies, but material discrepancies should be resolved with primary-source data.
Keep fraud flags distinct from credit weaknesses
Low liquidity may be a credit risk. An altered statement may be a fraud risk. The escalation route, evidence standard, and access controls should differ, even when both affect the final decision.
A short, consistent verification gate protects analyst capacity and ensures the underwriting decision is based on a borrower and data set the lender can trust.