When making a cash-secured LOC to an individual borrower, how to determine there is a business purpose established?

Is business purpose established when underwriters put down the purpose of line is for borrower's business? or we need more documentation to prove the borrower does have a business? or we need to go even further to prove the loan proceed goes to the business?

Please kindly let me know your thoughts. Thanks

This should be very obvious from commercial loan underwriting where the nature of the customer's business should be discussed, the purpose of the loan, source of repayment, etc. If this is not documented, the bank has a safety and soundness issue rather than a CRA issue. If it is a very small loan for business purpose, underwritten on the individual's credit, there still need to be standards for determining the business purpose. Visit with the lending area to determine the credit policy.