University of Twente Student Theses
Peer-to-peer Invoice Financing : Can it be an attainable financing option for start-up companies to address their financing needs?
Buker, Noël (2024) Peer-to-peer Invoice Financing : Can it be an attainable financing option for start-up companies to address their financing needs?
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| Abstract: | In recent years, the financial landscape for (start-up) companies has undergone a significant transformation. Driven by technological innovation, countless new financial opportunities have become available. One of those opportunities lies in the form of peer-to-peer (P2P) invoice financing via a platform approach, invoice financing in general is used by companies to accelerate cash flow, improve working capital rates and therefore support liquidity. This has been identified as the foremost reason for start-up companies to seek financing, also being the companies that face the largest constraint in attaining (invoice) financing traditionally. Traditional invoice financing- and P2P platforms in general are well-researched subjects. However, in existing academic literature the subject of P2P invoice financing is researched limited or indirectly focused on. Therefore this exploratory researched paper is dedicated to investigating P2P invoice financing as an attainable financing option for start-up companies to address their financing needs. Based on the synthesizing of limited- and indirect academic literature existent, assumptions were created regarding core aspects of P2P invoice financing in regard to start-up companies financing needs, forming the theoretical framework for this research paper. Coherently, the conceptual framework constructs hypotheses regarding the attainability of P2P invoice financing and its perceived ability to address financing needs of start-up companies. A research design has been used to empirically explore these different aspects by employing a content analysis of P2P invoice financing platforms to identify key features that embody the characteristics of P2P invoice financing. Following this, a survey was conducted among entrepreneurs to gather insights on their perceptions regarding different features of P2P invoice financing platforms and their financing needs, creating a perception towards the characteristics of P2P invoice financing. The empirical findings of this research paper indicate that P2P invoice financing platforms in the sample researched mostly possess features that enhance the attainability of financing for start-up companies by minimizing the requirement of financial records, credit history and collateral for financing. These traditional eligibility criteria are substituted by an emphasis on alternative criteria like a minimum required operating history and credit-worthiness checks on customers. Additionally, entrepreneurs in the sample researched showed a positive perception towards the attainability features presented with, further supporting the attainable characteristic of P2P invoice financing. Empirical findings also indicate positive perceptions towards features enhancing the flexibility and short process duration of P2P invoice financing. Another feature identified to be generally present in P2P invoice financing platforms, which was not identified by the review of literature is accounts receivable management. Findings return mixed perceptions towards this feature, along with it not being substantiated, creates a suggestion for future research opportunities. In conclusion, P2P invoice financing is affirmed as an attainable financing option for start-up companies to address their financing needs by supporting their need for managing cash flows, increasing working capital and improving liquidity while being a financing option that is attainable, flexible and fast, aligning with the dynamic natures- and operating environments of start-up companies. Affirmation of the central research question is supported by the acceptance of hypotheses constructed. This research paper contributes to the academic foundation of P2P invoice financing research, posing as a starting point for future academic- and practical exploration of this niche subject. The insights resulting from this research paper should be generalized with large precaution because of the exploratory nature of this research, the limited availability of academic literature and imperfect samples when conducting the content analysis and survey. However, it can give indications regarding the characteristics of P2P invoice financing, posing as a starting point for more in-depth research. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 83 economics, 85 business administration, organizational science |
| Programme: | Business Administration MSc (60644) |
| Link to this item: | https://purl.utwente.nl/essays/99895 |
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