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Glossary · People and paperwork

Fraudulent Financial Statement

In short

This is a financial document containing false or misleading information, often used to inflate a business's value or performance. Relying on one can lead to buying a business worth less than you paid, and it's a crime.

What it means in a deal

Lenders require accurate financial statements to assess repayment capacity. If a seller provides fraudulent statements, it can invalidate the loan approval or lead to criminal charges. Always verify financial data with IRS transcripts (4506-T) and engage a qualified accountant for thorough due diligence.

Official sources

13 CFR Part 120 — Business Loans

Office of the Federal Register · Federal regulation

SOP 50 10 — Lender and Development Company Loan Programs

U.S. Small Business Administration · SBA Standard Operating Procedure

Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.

Related terms

Common questions about Fraudulent Financial Statement

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Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.

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