Glossary · People and paperwork
Know Your Customer
In short
Aka: KYC. This is a mandatory process where lenders verify a borrower's identity, financial history, and source of funds to comply with anti-money laundering laws. It's a rigorous part of SBA loan underwriting.
What it means in a deal
Expect to provide extensive personal and financial documentation, including bank statements, tax returns, and explanations for any large deposits. For foreign-sourced equity, KYC is particularly thorough, requiring detailed proof of fund origins. Be proactive in gathering all requested information to avoid delays.
Official sources
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 Know Your Customer
- How do I know if a franchise is safe to buy?
- How do I know if my business is 'small' enough to qualify for an SBA loan?
- Can a high customer concentration (e.g., one customer is 50% of revenue) jeopardize my SBA 7(a) loan approval?
- What if the business I'm acquiring relies heavily on a single major customer?
- How does the SBA typically value intangible assets like customer lists or software for collateral?
- How does high customer concentration in a target business affect SBA 7(a) acquisition loan approval?
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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