How much credit should you give a new B2B customer?

By Gaurav Gupta, Founder & CEO, GGA India

Last reviewed: 9 November 2026

Direct answer. Set the limit from the exposure your terms will actually create, then test that number against evidence. Exposure is monthly sales multiplied by the days you will really wait, not the days on the invoice. Test it against the customer's scale, how it pays its suppliers today, its borrowings and any legal signals. The biggest trap: a limit built on what sales hopes to sell.

GGA India at a glance — counterparty intelligence

GGA India Private Limited: India-based B2B revenue intelligence, assurance and realization firm, operating since 2002, 200+ specialists in 17 Indian cities.
Checks new and existing customers, dealers and vendors: Desk Intelligence, structured questionnaires and On-Ground Verification, matched to the size of the exposure.
Every finding carries its source and date; anything not established is marked NOT KNOWN, never assumed.
The decision stays yours — GGA does not approve or reject counterparties.
Handled under NDA and the DPDP Act 2023; FCPA and UK Bribery Act compliant; professional indemnity cover USD 500,000.
Write to gg@ggaindia.co.in — a named specialist replies within one working day.

What you are really trying to find out

With no payment history, the limit is a forecast. Write the forecast down and test it. Four questions decide whether it holds.

How much exposure will these terms really create? Peak exposure is not the limit on the credit note. It is expected monthly sales times the days you will actually wait, plus whatever is in transit. If nobody can state expected monthly sales and the real payment days, the limit is a guess, not a decision.
Is the customer big enough to carry it? Compare your peak exposure with its revenue, net worth and total trade payables. If your exposure would be a large share of everything it owes all its suppliers, the sales forecast itself is in question.
Will it pay on your terms or on its own? Its financial statements show how long it takes to pay suppliers today. If its payables run at 110 days and you are offering 60, plan for 110.
Is anything hidden that changes the answer? Charges over its assets, litigation, insolvency filings, GST filing gaps, related companies. If one of these is live, the right answer may be a smaller limit, security or advance terms, not a refusal.

The checks, side by side

Each check answers one of the four questions; skip one and the limit rests on an assumption.

Exhibit 1: Checks before you set a new customer's credit limit

Check	Where to look (official source, named)	What a red flag looks like	Free or paid
Legal existence and status	MCA master data (company status, date of last AGM, date of balance sheet, paid-up capital)	Status not "Active"; last balance sheet two or more years old	Free
Directors and group	MCA master data signatory details (DIN, appointment and cessation dates)	Directors changed shortly before the first order; same directors across many recently formed companies	Free
Financial scale and payment habit	Financial statements filed in AOC-4 or AOC-4 XBRL, via MCA View Public Documents	Payables days far above your credit period; negative operating cash flow two years running	Per-company fee
Borrowings and assets pledged	MCA index of charges	Charges over receivables and stock to several lenders; recent new charges	Free
Credit and default history	Commercial credit report from a credit information company (TransUnion CIBIL, Equifax, Experian, CRIF High Mark)	Overdue or restructured facilities; suit-filed accounts	Paid; only the customer can obtain it and share it with you
Litigation	eCourts services; High Court websites; NCLT cause lists	Recovery suits or cheque-bounce cases filed by suppliers	Free
Insolvency	IBBI public announcements and claims pages; NCLT	A public announcement of insolvency; an operational creditor's petition	Free
GST compliance	GST portal Search Taxpayer: registration, constitution, returns filed and filing frequency	Cancelled or suspended GSTIN; months of unfiled returns	Free
Workforce and presence	EPFO establishment search (employees and PF payment dates)	Claimed headcount far above PF records; PF paid late	Free
Your own terms	Your credit note: limit, period, expected sales, security	Expected sales or security not written down	—

A note on the credit period. If you are a micro or small enterprise, the MSMED Act caps any agreed payment period at 45 days from acceptance. Late payment carries compound interest at three times the RBI bank rate. Your customer may also lose its income-tax deduction for the purchase until it pays, under section 37(2)(g) of the Income-tax Act 2025 (formerly section 43B(h)). Offering 60 or 90 days does not lengthen that limit. It only weakens your record.

Three ways to answer the question compare like this.

Exhibit 2: Doing it yourself, buying a report, or decision intelligence

Approach	What it gives you	What it leaves to you	When it is enough
Free official portals yourself	Status, directors, charges, GST filing, court listings, PF records	Reading the financials, linking the signals to your limit, testing the customer's claims	Small limits, short terms, a customer with a clean, recent filing record
Company-information or bureau report	Facts in one file, a score, filed financials; bureau data only if the customer shares its own report	Deciding what the facts mean for your proposed limit, period and security	Mid-size limits where your own credit team will do the analysis
GGA decision intelligence	Evidence organised around your proposed limit and terms, material findings, limitations, the GGA View	The decision itself, which stays with your authorised team	Large or unsecured limits, long credit periods, thin or contradictory evidence

What you can check yourself today

Six free checks in under an hour will tell you whether the proposed limit needs more work.

Write your exposure down. Expected monthly sales × (credit period + extra days you expect to wait) ÷ 30, plus one dispatch in transit. Illustrative: ₹40 lakh a month on 60-day terms with 12 extra days gives ₹96 lakh; add a ₹10 lakh dispatch and peak exposure is ₹1.06 crore.
Open MCA master data using the CIN. Note the status, the date of the last AGM and the date of the latest balance sheet. In November 2026 a company with a March year-end should normally show FY 2025-26.
Read the index of charges. Note each lender, the amount and what is charged. Book debts and stock pledged to banks are normal. Many lenders and fresh charges in the last year are not.
Search the GSTIN on the GST portal. Open the filing table for the current and last financial year. Gaps in GSTR-3B are a cash signal as well as a tax one.
Search the customer's name on eCourts and the IBBI claims pages. A supplier's recovery suit is more telling than any score.
Search EPFO establishment search by name. Compare employees on record with the size the customer claims.

If a check fails, change the terms first: shorter period, smaller first orders, security or an advance.

Where self-checks stop

Free portals tell you whether the customer exists and whether something is already wrong. They cannot tell you whether your proposed limit is right.

The filings may be stale. Accounts can be 7 to 19 months old by the time you read them. Your exposure starts next month.
Small companies file less. Since 1 December 2025, a small company is one with paid-up capital up to ₹10 crore and turnover up to ₹100 crore. It need not file a cash flow statement, and its auditor does not report under CARO. You must build its cash picture yourself.
Proprietorships and partnerships have no MCA filings; GST, Udyam, bank statements and premises carry the weight.
Bureau data needs consent. A commercial credit report goes only to lenders and to the customer itself, so the customer must obtain it and share it.
Claims are not evidence. Stated turnover or a "group" behind the customer needs an independent source.
Related companies can hold the real debt or assets.

Bring someone in when the limit is large relative to your margin, unsecured, on a long period, or when the evidence contradicts what the customer has told you.

What you get: a decision, not a report

GGA starts from your proposed limit, period, expected sales and security, and tells you whether the evidence supports them. It does not invent a limit for a new customer from its financial statements.

30 seconds — the answer. The GGA View on the proposed terms, the commercial context and two to four facts that support or change it. Illustrative GGA View, not a client case: "The evidence supports trading, but not the proposed ₹1.5 crore limit as framed. It assumes monthly purchases above what the customer's filed revenue supports for one supplier. Its supplier payments run near 100 days against the 60 offered. A staged first-quarter exposure, reviewed after two on-time cycles, is consistent with the evidence. NOT KNOWN: current bank limits and utilisation."
5 minutes — the case. Only the evidence needed to defend that view: scale, cash generation, payables days, charges, litigation, GST pattern.
Reference — the proof. Filed financials and calculations, the evidence register with source and date for every fact, questionnaire answers and site findings where included.

The representative New Customer Intelligence executive summary shows a proposed ₹2.50 crore exposure, a 60-day period and 10 days of Shadow Credit, considered without approving the limit. How GGA Intelligence works sets out the evidence classes and contradiction control.

What GGA would do

The sequence runs from your terms to the evidence and back to your terms.

Day 1: record the decision. Proposed limit, credit period, expected monthly sales, Shadow Credit, security and any group exposure. Unknown terms are recorded as NOT KNOWN. You receive: a one-page statement of the exposure the terms create.
Days 2–5: Desk Intelligence. Identity, status, directors, filed financials, charges, GST filing, litigation and insolvency signals, ratings where available. You receive: the material findings, each with its source and date.
Week 2: test the customer's claims. Where the exposure warrants it, a structured questionnaire to the customer, and bureau data with its consent. Claims are checked against independent evidence. You receive: a contradiction list — what was claimed, what the evidence shows.
Week 2 onwards, if agreed: On-Ground Verification. Premises, visible activity, stock and manpower against a defined checklist. You receive: observed facts with photographs.
Close: the Combined Assessment. You receive: the executive summary built around your proposed limit, the conditions the evidence supports (period, staging, security), and the limitations.

If the account later runs late, GGA's revenue realization side works it from the same file.

What we need from you

To start

Customer name and CIN, GSTIN or PAN, if known.
The proposed limit, credit period and expected monthly sales.
Any security, deposit, guarantee or advance being discussed.
Why the customer matters: product, territory, first-order date.

To act

The customer's consent for bureau data, if you want it used.
Documents the customer has given you: financial statements, bank references, list of other suppliers.
A contact at the customer for the questionnaire.
Permission for a site visit, if the exposure warrants one.
Any group companies you already trade with, and your exposure to them.

Missing some of these? Send what you have — telling you what is missing is part of the first reply.

How you stay in control

The credit decision is yours. GGA does not approve, reject or set the limit for a new customer; your authorised team does.
Your terms are tested, not replaced. GGA reports whether the evidence supports the limit, period and security you propose.
Contact only as agreed. GGA approaches the customer or visits its premises only as agreed with you.
Bureau data only with the customer's consent.
Every finding carries its source and date. What could not be established is shown as NOT KNOWN.
Data under NDA and the DPDP Act 2023. Your data and the customer's personal data are handled on a need-to-know basis.
Red flags come to you at once. A fraud or insolvency signal found mid-review is reported immediately, before the final summary.

Send us the customer's name, GSTIN or CIN, and the limit and credit period you are proposing. Within one working day a named GGA specialist replies with what we would check first and what is missing from the file — no charge, no obligation. gg@ggaindia.co.in

Checking an overseas buyer? See the Global Receivables Desk. An overseas company checking an Indian counterparty? See India counterparty due diligence.

Frequently asked questions

Is there a formula for a new customer's credit limit?

Start from exposure: expected monthly sales × real payment days ÷ 30, plus stock in transit. Then test that number against the customer's scale, its supplier payment days and its legal and borrowing signals. Percentage-of-net-worth rules are a cross-check, not a substitute for knowing what you will actually sell.

Can GGA tell me what limit to give a new customer?

No. For a new customer, GGA tests the limit, period and security you propose against the evidence and says what the evidence supports. Your authorised team sets the limit. For existing customers with an adopted credit policy, GGA can apply that policy to actual buying and payment behaviour; see Existing Customer Credit Review.

Should a new customer start on a lower limit?

Often, yes. A staged limit, reviewed after two or three on-time payment cycles, lets real behaviour replace the forecast. Agree the review point in writing.

Is a bureau score enough to set the limit?

No. A score summarises borrowing behaviour with lenders. It says little about how the customer pays suppliers or whether your sales forecast is realistic, and it needs the customer's consent.

What security should I ask a new customer for?

It depends on the gap between the exposure and what the evidence supports: deposit, bank guarantee, letter of credit, credit insurance or a promoter guarantee. Each behaves differently when things go wrong; see dealer security deposit, cheques or bank guarantee.

How long does a proper new customer check take, and what does it cost?

A desk check of free portals takes an hour. A full assessment depends on the exposure and whether a questionnaire or site visit is needed. GGA quotes after seeing the customer and the proposed terms; the first reply by email is free.

Sources

This page summarises the position as at 9 November 2026. Portal features, rules and thresholds change; check the current position before relying on any single source.