Algorithm for Assessing the Risks of Small Business Project Financing

DOI

10.2991/iscfec-18.2019.200How to use a DOI?

Keywords

risk, financing risks, risks of small business, algorithm for risk assessment

Abstract

The article examines the algorithm for estimation of the risks of small business financing, based on the method of median distributions in the formation of the en-terprise's investment strategy with subsequent vector optimization of local evalua-tion criteria. The choice of the optimal method for estimation of the risks of small busi-nesses financing is characterized by the complexity and high degree of various factors and conditions interdependence, and also by the need of taking into ac-count all possible parameters of the economic system. While carrying out information training, there is a need to identify first all the constraints that are imposed on the use of resources necessary to achieve the stra-tegic objectives of financing, as well as to determine the most beneficial alterna-tive to which these resources need to be invested. The list of risks inherent in entrepreneurship is extremely wide. The choice of a method for assessing the risk of financing is objectively one of the most im-portant stages of investment planning, and its purpose is to identify the extent of the possible consequences of the risk. Therefore, when considering each particular type of risk, as a criterion for ac-cepting or not accepting an investment project, it becomes necessary to apply multi-criteria analysis methods in order to choose the best alternative. The authors suggest the algorithm for estimation of the risks of small busi-nesses financing. In the course of the research conducted in the article, it is convincingly proved that the suggested algorithm provides an objective estimation of the options for small businesses financing, encompassing a list of possible heterogeneous risks that may arise during the implementation of the investment project, while reveal-ing the most effective project for implementation in the first place. The received preference vector for the group of risk factors determines the top-priority objects for investments in the small business sector.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - N. R. Astarkina
AU  - E.S. Kurbatova
AU  - E. A. Puzanova
PY  - 2019/01
DA  - 2019/01
TI  - Algorithm for Assessing the Risks of Small Business Project Financing
BT  - Proceedings of the International Scientific Conference "Far East Con" (ISCFEC 2018)
PB  - Atlantis Press
SP  - 879
EP  - 882
SN  - 2352-5428
UR  - https://doi.org/10.2991/iscfec-18.2019.200
DO  - 10.2991/iscfec-18.2019.200
ID  - Astarkina2019/01
ER  -