{"ok":true,"canonical_url":"https://dealroom.so/glossary/borrower-fraud","api_url":"https://dealroom.so/api/public/glossary/borrower-fraud","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"borrower-fraud","term":"Borrower fraud","group":"People and paperwork","definition":"Intentional deception by the borrower to obtain an SBA loan or avoid repayment. This is a federal crime with severe penalties and causes the SBA to deny its guaranty.","what_it_means":"Any deliberate act to falsify information, hide material facts, or misuse loan funds constitutes borrower fraud. This will lead to the lender calling the loan, the SBA denying its guaranty, and potential criminal prosecution. Ensure all financial statements and representations are truthful and complete.","url":"https://dealroom.so/glossary/borrower-fraud","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"material-misrepresentation","term":"Material misrepresentation","url":"https://dealroom.so/glossary/material-misrepresentation"},{"slug":"intentional-misrepresentation","term":"Intentional misrepresentation","url":"https://dealroom.so/glossary/intentional-misrepresentation"},{"slug":"penalty-of-perjury","term":"Penalty of perjury","url":"https://dealroom.so/glossary/penalty-of-perjury"}],"related_questions":[{"question":"What specific documentation is required in the Universal Purchase Package (UPP) to support a request for guaranty purchase when the borrower has defaulted due to fraud?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-in-the-universal-purchase-package-upp-to-support-a"},{"question":"What documentation is needed to verify a borrower's equity injection when it comes from an existing business owned by the borrower?","url":"https://dealroom.so/for-lenders/questions/what-documentation-is-needed-to-verify-a-borrower-s-equity-injection-when-it-comes-from-an"},{"question":"What does 'SBA guarantee' actually mean for me, the borrower?","url":"https://dealroom.so/sba-loans/basics/what-does-sba-guarantee-actually-mean-for-me-the-borrower"},{"question":"What does the 'SBA guarantee' actually mean for me, the borrower?","url":"https://dealroom.so/sba-loans/basics/what-does-the-sba-guarantee-actually-mean-for-me-the-borrower"},{"question":"How does the SBA guarantee truly benefit me as the borrower?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-guarantee-truly-benefit-me-as-the-borrower"},{"question":"Does the SBA guaranty protect me, the borrower, if my business fails?","url":"https://dealroom.so/sba-loans/basics/does-the-sba-guaranty-protect-me-the-borrower-if-my-business-fails"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Borrower fraud","url":"https://dealroom.so/glossary/borrower-fraud","source_type":"DealRoom Data"}}