How to Check if a Supplier is Legitimate: A Practical Guide for SME Owners

Every year, thousands of small businesses lose money to supplier fraud. The mechanics are almost always the same: a supplier is found online or through a broker, initial contact is professional and reassuring, a deal is agreed, a deposit or full payment is wired — and then the supplier disappears, delivers nothing, or delivers counterfeit goods. Business payment fraud is one of the most frequently reported categories of fraud affecting SMEs; always verify independently and report suspected fraud to your national authority.

The frustrating truth is that most of these losses are preventable. Banks perform Know Your Customer (KYC) checks on every business they onboard. These checks are not secret — they follow a publicly documented methodology. This tool applies the same logic so that any SME owner or importer can assess a new supplier in under two minutes, before any money changes hands.

For a deeper understanding of the risks, read our guides on payment method risks in international trade, how to read a company registry entry, and country risk in global sourcing.