The Importance of building trust in business relationships for SME´s

Larger corporations spend millions in due diligence and background checks every year. According to Intelmarketresearch, in 2025 the global due diligence market size for consulting firms reached 12.6B US$. Only the ten largest firms revenues (Kroll, Deloitte, FTI, etc) accounted to due diligence practice are more than 3B US$. However small and mid size firms can not spend as much as large firms, in fact their due diligence/background check spending is very low, therefore their chances of success much lower and the imbalance of power between small and large firms widens every year.

Large vs SME´s spending in due diligence and background checks

Due diligence helps firms to make better and more accurate decisions in a variety of topics, such as M&A, HR, vendor hiring, and other key areas reducing the risk and increasing the chances of success.

What a large firm, PE firm or Hedge fund does?

Larger firms hire due diligence and background checks firms to reduce risks in situations such as:

• Mergers and Acquisitions

• Entering new markets

• Starting business relationships

• Hiring business developers

• Expanding to new geographies

• Hiring vendors and subcontractors

• Hiring new employees

• Partnering with other firms

• Acquiring smaller firms

Any of the above activities require a previous screening or diligence, more or less expensive but they do it on continuos basis.

What smaller firms, SME´s, do?

There are many small firms doing business internationally which simply can not pay a due diligence or a background check every-time they do business with another company or anytime they hire a executive. Most of them do it on their own despite they don´t have the knowledge to do so. They also ask for referrals which are usually people with knowledge of the candidate or firm who will rarely provide adverse or red flag information.

Globally million of business deals are not successful due to lack of trust or difficulties to verify information about the company. Furthermore executive hirings failures happen quite often, due to lack of reliable information about performance, ethics or trust.

A real life example

In February 2025 an oil and gas intermediary contacted us to find a solution for a long lasting business relationship that was stuck for months. Both companies were keen to do business, both had a significant stake to win. However firm 1 was a small firm from Turkey and firm 2 was a firm from Colombia. During months they were in talks but at the time of providing the deal information and necessary assurances to protect their interests none of the firms trusted one another.

Firm 1 provided their business details and an LOI, but firm 2 was reluctant to sign due to trust issues and difficulties to verify what they were told by firm 1. Both companies had questions such as:

• Does the other company exists?

• Are they solvent?

• Are the owners the real ultima beneficial owners?

• Have the directors good reputation? and the owners?

• Is the product coming from a sanctioned country?

• Do they really have an agreement with the target refinery?

• Are we engaging with ghost company?

Firm 2 approached us to verify their own company information and requested to at least verify the following items:

• Company registration, foundation date and activity

• Latest financial statements

• Shareholder structure

• Directorships

• Media and online reputation

• AML/CTF and sanctions checks

• Litigation records

Firm 1, requested us verification information about firm 1, upon their request. Knowing who they had in front and at least a minimum set of basic company information unlocked the negotiations and allowed the deal to happen. Millions of deals fail due to lack of trust between small businesses around the world.

All these questions can be solved by conducting a self due diligence of your company and showing your partners in business that your company exists, who owns the company, who are the directors, financial statements and solvency information, sanctions, AML/CTF clearance.

Business counter-parties can contact us and previous authorisation from the client to provide assurance of a basic set of items, such as existence, activity, foundation dates, tax status, shareholders, directors, AML/CTF and sanctions checks, litigation records.