Glossary
Synthetic merchant
Also called: fabricated merchant, shell merchant
One-sentence definition
A synthetic merchant is a fabricated business identity created to obtain financing, typically supported by forged documents, fake bank statements, and circular cash flows that simulate a real operating business.
Key takeaways
- A pre-meditated fraud, distinct from inflation by a real merchant.
- Often involves PDF integrity issues — the statement itself is fabricated.
- Cash flows are designed to mimic a real business but lack organic counterparty diversity.
Why it matters for MCA underwriting
Synthetic merchant fraud is the highest-loss category for MCA funders because there is no real business to recover from. Detection before funding is the only meaningful defense.
How Vyaso detects synthetic merchant
Vyaso's PDF integrity layer catches forged statements. The counterparty layer surfaces unusual concentration and related-party flows characteristic of synthetic operations. The agentic synthesis step combines signals across layers to flag these files.