Glossary · operations

OFAC screening OFAC

Also called sanctions screening, SDN check.

The sanctions check every US funder runs against Treasury's Specially Designated Nationals and other blocked-persons lists before releasing funds.

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 Office of Foreign Assets Control administers US sanctions, and the obligation to comply falls on all US persons - including funders, factors, brokers and the banks that move the money. Screening covers the business, its beneficial owners above a threshold, and often signers and affiliated entities, matched against the SDN list and other restricted lists.

A match stops the transaction. Where property of a sanctioned party is involved, the obligation may be to block it and report, not simply to decline - which is why funders are often unable to explain much about what happened. There is no credit judgment involved and no appeal to the funder.

False positives are common, because the lists match on names and common names recur. Clearing one generally requires identifying information - full legal name, date of birth, identification documents - passed through the funder's compliance function.

Where this one catches people

An OFAC hit is not a credit decline and cannot be shopped around: every other US funder screens the same lists and reaches the same result. Treat it as an identity problem to resolve with documentation rather than a lender problem to route around.

Read next

Non-bank lenderA funder deploying its own or investors' capital without a bank charter, and therefore without deposit fundin… Qualification criteriaThe published floors a funder applies before a file is properly reviewed - time in business, monthly revenue,… Restricted industryBusiness types a funder will not fund at all, maintained as an internal list keyed to industry codes and driv… StipsThe documents and conditions an underwriter requires before an approval turns into funded money — the list th…

OFAC screening — common questions

What does ofac screening mean?

The sanctions check every US funder runs against Treasury's Specially Designated Nationals and other blocked-persons lists before releasing funds.

Where does ofac screening catch people out?

An OFAC hit is not a credit decline and cannot be shopped around: every other US funder screens the same lists and reaches the same result. Treat it as an identity problem to resolve with documentation rather than a lender problem to route around.

Is ofac screening the same as an interest rate?

OFAC screening 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 ofac screening apply to?

It is not specific to one product — it appears across the market.

Is there a worked example of ofac screening?

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 ofac screening?

Non-bank lender, Qualification criteria, Restricted industry, Stips.

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.