{"ok":true,"canonical_url":"https://dealroom.so/glossary/fraudulent-financial-statement","api_url":"https://dealroom.so/api/public/glossary/fraudulent-financial-statement","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":"fraudulent-financial-statement","term":"Fraudulent Financial Statement","group":"People and paperwork","definition":"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":"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.","url":"https://dealroom.so/glossary/fraudulent-financial-statement","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":"fraud","term":"Fraud","url":"https://dealroom.so/glossary/fraud"},{"slug":"misrepresentation","term":"Misrepresentation","url":"https://dealroom.so/glossary/misrepresentation"},{"slug":"irs-transcripts","term":"IRS transcripts (4506-T)","url":"https://dealroom.so/glossary/irs-transcripts"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"}],"related_questions":[{"question":"What if my personal financial statement shows low liquid assets?","url":"https://dealroom.so/sba-loans/basics/what-if-my-personal-financial-statement-shows-low-liquid-assets"},{"question":"How important is my personal financial statement for an SBA 7(a) loan application?","url":"https://dealroom.so/sba-7a/questions/how-important-is-my-personal-financial-statement-for-an-sba-7-a-loan-application"},{"question":"What is a 'personal financial statement' and why is it needed for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-a-personal-financial-statement-and-why-is-it-needed-for-an-sba-7-a-loan"},{"question":"What does a 'personal financial statement' entail and why is it needed for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/what-does-a-personal-financial-statement-entail-and-why-is-it-needed-for-an-sba-7-a-loan"},{"question":"When is a personal financial statement (SBA Form 413) required for non-owner guarantors of a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/when-is-a-personal-financial-statement-sba-form-413-required-for-non-owner-guarantors-of-a"},{"question":"What if my personal financial statement shows low liquidity, but I have a strong credit score and business plan?","url":"https://dealroom.so/sba-7a/questions/what-if-my-personal-financial-statement-shows-low-liquidity-but-i-have-a-strong-credit-sco"}]},"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 — Fraudulent Financial Statement","url":"https://dealroom.so/glossary/fraudulent-financial-statement","source_type":"DealRoom Data"}}