Before supplying on credit, confirm the buyer's GSTIN is Active and the name matches the order (a buyer registered in Karnataka has a GSTIN starting 29), read the GST filing record, and check court cases and defaults reported by other suppliers. For startup clients, also look for recent filing gaps and new court cases, which often come before a funding problem becomes public. FundRaksha Trust runs the GST check free and the full buyer report in one place.
How credit works in Bengaluru
Service suppliers in Bengaluru, from staffing firms to developers and design agencies, typically bill monthly in arrears or on milestones, so they are always one or two months of work ahead of payment. Startups pay well while funded and can stop abruptly when a round is delayed. Large companies pay, but after procurement and approval cycles.
Garment exporters in Peenya and Bommanahalli, and precision-engineering and electronics units, have more conventional trade dues with buyers and job-workers.
Credit risks typical of Bengaluru's trades
- Startups running short of cash, paying salaries first and vendors last.
- Scope disputes raised after delivery to delay payment.
- Staffing invoices paid late while the staff continue working.
- Large-company approval cycles that stretch payment beyond the contract.
- Garment job-work chains where the exporter pays after the overseas buyer.
Checks to run on a buyer
- Validate the GSTIN with the GSTIN validator. A Karnataka registration starts with 29; a different prefix means the buyer is registered in another state, which is fine if it matches the billing address on the order.
- Run the [free Trust check](https://www.trust.fundraksha.com/gst-lookup): status Active, legal and trade name matching the purchase order, registration date and constitution.
- Read the filing record in the Advance GST report (129 RP), which also shows registered contacts, associated people and places, and defaults reported by other suppliers.
- For a larger order, the GST + Financial report (499 RP) adds court cases, tribunals and FIRs and the owner's credit score and loan record, fetched with the owner's consent, and ends in a give-credit, caution or avoid decision.
For a monthly-billed service client, re-check the client every quarter. A Trust watchlist (99 RP per buyer per month) alerts you to new supplier reports.
Worked example: a staffing agency and a funded startup
A Bengaluru staffing agency is asked to place 12 engineers with a startup at ₹9 lakh a month, billed monthly on 30 days. The GSTIN starts 29 and is Active. The GST + Financial report shows filing on time until recently, but GSTR-3B missing for the last two months and one recovery suit filed by a vendor. The agency asks for one month's billing as a deposit and a 15-day payment term.
If a buyer stops paying
Act early. Start with a payment follow-up, then a legal notice by email and WhatsApp or by registered post with proof of delivery. For a bounced cheque, the Section 138 notice must go within 30 days of the return memo.
A micro or small supplier with Udyam registration located in Karnataka can file on MSME Samadhaan before the Karnataka Micro and Small Enterprises Facilitation Council (Directorate of Industries and Commerce, Government of Karnataka, Bengaluru) once the buyer is past the agreed period, which the MSMED Act caps at 45 days. Interest runs at three times the RBI bank rate, compounded monthly.
Report the defaulter so other suppliers are warned, and for recovery help in the city see FundRaksha Bengaluru.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.