SFNet Task Force Calls for Strengthening Daily Controls and Enhancing Oversight

NEW YORK: As private credit markets grapple with renewed scrutiny following recent bankruptcies and liquidity concerns, a new study from the Secured Finance Network (SFNet) finds that fraud fears may be outpacing reality. The report from SFNet’s 2026 Blue Ribbon Fraud Task Force shows that while concerns about fraud are rising across credit markets, including emerging consternation regarding the use of artificial intelligence enabled impersonation, most secured finance portfolios remain stable.

In a survey of 29 lenders across traditional asset-based lending, factoring and supply chain finance - financial solutions that comprise a significant share of this ecosystem, while 45% believe fraud is increasing industry-wide, 67% report fraud levels in their own portfolios have remained stable and only 17% report an increase in fraud cases on their books.

While the findings suggest recent high-profile credit events have heightened anxiety for the $6.5 trillion secured lending market, it has not translated into widespread deterioration within portfolios.

“Headlines have amplified concern across private credit, but at least in our traditional bank and non-bank portfolios performance tells a more measured story,” said Rich Gumbrecht, CEO of SFNet. “Secured lending structures, when paired with disciplined collateral monitoring, continue to perform. The real priority is ensuring controls are keeping pace with evolving risks.”

Based on an analysis of 26 real-world case studies, the SFNet Task Force identified several recurring fraud tactics. The most prevalent involved accounts receivable and billing manipulation, which appeared in 58% of cases and typically included fabricated or inflated invoices designed to overstate borrowing ability. Inventory re-aging was present in 35% of cases, often involving altered records to make stale inventory appear eligible. Cash diversion, or “harvesting,” accounted for 12% of cases and generally involved redirecting company funds while delaying payment of critical obligations.

The Task Force also noted the emerging threat of cyber and AI-enabled fraud, including impersonation schemes used to facilitate fraudulent wire transfers.

“The takeaway is not alarmism, it’s discipline,” said Betty Hernandez, President of SFNet and Chair of SFNet’s Fraud Task Force. “Secured finance is a $6.5 trillion ecosystem that has historically demonstrated resilience.”

Survey respondents cited top vulnerabilities as less stringent monitoring and controls (76%), lack of training to spot warning signs (62%), and complex deal structures (55%).

While half of respondents say they have already strengthened monitoring procedures in response to recent events, the report warns that as private credit grows in scale and complexity, and as more capital flows into semi-liquid and retail-oriented products, verification standards must modernize.

The Task Force recommends a tiered implementation strategy focused first on strengthening daily controls and then enhancing oversight. At the operational level, lenders should cross-check borrowing base reports against actual cash receipts and physical inventory, confirm all wire instruction changes through a separate, trusted out-of-band channel, and conduct physical inventory verification in higher-risk transactions. At the governance level, institutions should perform independent diligence even in syndicated deals, rotate field examiners periodically to preserve objectivity, and invest in training programs to help teams identify fraud warning signs early.

Read the full report here: https://www.sfnet.com/docs/default-source/uploadedfiles/systemic-resilience-in-secured-finance.pdf?sfvrsn=88596708_2

About Secured Finance Network

Founded in 1944, the Secured Finance Network is an international trade association connecting the interests of companies and professionals who deliver and enable secured financing to businesses. With more than 1,000 member organizations throughout the US, Europe, Canada and around the world, SFNet brings together the people, data, knowledge, tools and insights that put capital to work. For more information, please visit SFNet.com.

Fonte: Business Wire