Find Me Funders
Know your business KYB
Also called business verification, entity verification.
Verification of the business entity itself — that it legally exists, is in good standing, operates where it claims, and is owned by the people signing.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
The corporate counterpart to KYC. Where KYC verifies individuals, KYB verifies the entity and the ownership behind it, and it is where a surprising number of otherwise sound applications fail.
What is checked
- Existence and standing with the secretary of state: is the entity active, or administratively dissolved for an unfiled annual report?
- Exact legal name and how it matches the bank account, the tax return and the application. Mismatches between legal name and DBA are the single most common snag
- EIN matching the entity name in IRS records
- Formation date, which drives time-in-business tests
- Registered agent and principal address, checked against the operating address and against the address on the bank statements
- Beneficial ownership: who owns what percentage, with identification of owners above a threshold
- Industry classification, which drives restricted-industry screening
- Adverse checks: sanctions lists, litigation, prior defaults, related entities with a funding history
Why funders care beyond compliance
A shell entity with a recent formation date, a virtual office and a bank account opened last month is the profile of application fraud. KYB is a fraud control at least as much as a regulatory one, and in short-term funding it is often the more important of the two.
Where this one catches people
Administrative dissolution stops deals dead and owners rarely know it has happened. A missed annual report or unpaid franchise fee can suspend an entity's good standing without anyone noticing until a funder runs the search. Reinstatement is usually straightforward but takes days to weeks depending on the state — which is fatal to a deal being funded this week. Check your standing before you apply, not after you are declined.
Read next
Know your business — common questions
What does know your business mean?
Verification of the business entity itself — that it legally exists, is in good standing, operates where it claims, and is owned by the people signing.
Where does know your business catch people out?
Administrative dissolution stops deals dead and owners rarely know it has happened. A missed annual report or unpaid franchise fee can suspend an entity's good standing without anyone noticing until a funder runs the search. Reinstatement is usually straightforward but takes days to weeks depending on the state — which is fatal to a deal being funded this week. Check your standing before you apply, not after you are declined.
Is know your business the same as an interest rate?
Know your business is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does know your business apply to?
It is not specific to one product — it appears across the market.
Is there a worked example of know your business?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside know your business?
DBA, Know your customer, Lien search, Stips, Time in business.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.