How to verify a B2B client's solvency before extending credit
Before approving a lease, financing arrangement, or trade credit, verifying your client's financial health is essential. This guide covers the data sources, financial ratios, and automated tools available to leasing, banking, and B2B financing teams.
In brief:verifying a B2B client's solvency means assessing their ability to meet financial obligations — lease payments, loan repayments, trade credit — using a combination of accounting data, bank flows, legal signals, and extra-financial indicators. The process can be done manually using public registries or automated via a scoring API that aggregates all sources in under 30 seconds.
Step 1 — Collect the right data sources
A reliable solvency check relies on four complementary source categories. Using only one (e.g. a credit bureau report) gives an incomplete picture, especially for small and young companies with limited public data.
Accounting data
- ✓Published balance sheets (2–3 years)
- ✓Income statement and operating margins
- ✓Equity position and retained earnings
Banking data
- ✓Open Banking flows (with client consent)
- ✓Physical bank statement upload (OCR)
- ✓Cash position and payment regularity
Legal data
- ✓Insolvency register (equivalent of Bodacc)
- ✓Company registry filings (incorporations, changes)
- ✓Litigation and enforcement notices
Extra-financial data
- ✓Payment behaviour (DSO, late payment frequency)
- ✓Age and growth trajectory of the business
- ✓Sector-specific risk indicators
Step 2 — Calculate the key solvency ratios
Once data is collected, solvency is assessed through financial ratios. The most relevant for B2B credit decisions are:
| Ratio | Formula | Interpretation |
|---|---|---|
| Debt-to-equity ratio | Total liabilities / Equity | > 2 signals high leverage risk |
| General liquidity ratio | Current assets / Current liabilities | < 1 indicates short-term payment risk |
| Financial autonomy ratio | Equity / Total assets | < 20% signals fragile balance sheet |
| Net debt / EBITDA | Net financial debt / EBITDA | > 4x indicates over-leverage |
| DSO (Days Sales Outstanding) | Receivables / Revenue × 365 | Rising trend signals collection problems |
For a deeper explanation of each ratio, see our guide to key solvency ratios.
Step 3 — Verify legal signals
Financial ratios alone are insufficient. Legal signals can indicate imminent distress even when accounts look acceptable. Key sources to check:
- Insolvency register: Check for safeguard, administration, or liquidation proceedings. In France, the Bodacc is the authoritative source.
- Company registry: Frequent changes in directors, registered address, or share capital can indicate instability.
- Late filing: A company that has not filed its annual accounts on time is a yellow flag — it may indicate cash flow difficulties or governance issues.
- Privilege inscriptions: Tax and social security debt inscriptions signal unpaid public liabilities.
Step 4 — Automate for scale
Manual verification works for occasional checks. When you process dozens of applications per month, automation becomes necessary. A scoring API aggregates all four source categories, calculates ratios automatically, and delivers a solvency score between 0 and 100 in under 30 seconds — with a full audit trail required by EU AI Act.
RocketFin's hybrid engine (AI + proprietary algorithm) aggregates +100 data points per file across accounting, banking, legal, and extra-financial sources. It covers companies with limited accounting history by cross-referencing all available signals, rather than refusing to score.
Frequently asked questions
What documents should I review to verify a B2B client's solvency?
The minimum is two years of published financial statements (balance sheet, income statement, cash flow). Complement these with bank statements (Open Banking or OCR upload), official registries (Companies House equivalent, insolvency register), and any available payment behaviour data. The richer the data mix, the more reliable the assessment.
Is it possible to verify a company's solvency with just its registration number?
Yes, partially. A company's SIREN (France) or equivalent registration number allows you to access public financial filings, legal announcements, and registry data. A modern scoring engine can produce a solvency score from that alone, augmented with additional sources if available.
How long does a manual solvency check take?
A thorough manual check — retrieving filings, calculating key ratios, cross-referencing official sources — typically takes 30 to 90 minutes per company. Automated scoring platforms reduce this to under 30 seconds, with no analyst involvement.
What is the difference between a credit check and a solvency check?
A credit check typically refers to a point-in-time report from a credit bureau (historical data, behavioural scores). A solvency check is broader: it assesses a company's ability to meet obligations using fresh financial data — current balance sheet ratios, real-time bank flows, and legal signals — rather than relying solely on past payment history.
Verify client solvency in 30 seconds
RocketFin aggregates +100 data points per file and delivers a solvency score in under 30 seconds. API-first, EU AI Act compliant, hosted in France.