The Hive Project’s mission is to provide SMEs with the liquidity they need
We want to help small businesses get liquidity by leveraging block-chain technology and giving them financing options previously available only to big companies.
To do this, a whole new market will be created by logging all invoices (accounts receivables) securely on our customised block-chain so that they become efficiently tradable assets. By utilising block-chain technology to drive automation, we give lenders the ability to increase the amount of credit they extend.
The distributed ledger technology we use delivers immutable record keeping, enhanced data security and smart contracts. Powerful encryption is also in place to ensure data privacy, and digital signatures are used to prevent fraud. Not only that, but all our supply chain documentation and financing processes are automated, making the process far easier, cheaper, faster and more transparent.
With Hive Project, small companies will be able to get access to their money instantly. Simply upload an invoice to the Hive Project exchange, where the invoice’s irreversible traceability (ownership, due date, payment, etc.) makes it a tradable asset. The risk assessment process is automated using big data collected from the blockchain, and each offer made is based on the customer’s historical data, credit assessments and online profile.
Walk me through it …
Ok. So, how does it work? Well, every invoice is issued with a unique fingerprint using blockchain technology, which allows for the factoring process to be automated. Hive Project acts as a decentralised data room for all invoices, which are all traceable by issuer, owner and payer.
This means that invoices can therefore be offered to the shared economy liquidity pool (market) for factoring.
With Hive Project, small companies will be able to get liquidity quickly, without any human intervention. The process will be fully traceable and accountable, with a full history of every single transaction made. The credit scoring system used encourages SMEs to pay their invoices on time. Small businesses will also be able to grow much faster because they have access to more liquidity. On top of that, this all represents another step on the path towards decentralising the economy through digital currencies. Gone are the days when businesses will have to rely on central intermediaries when making transactions or obtaining financing.
It also serves to facilitate real time auditing, improve credit scoring, speed up finance approval times and much more. By allocating all the invoices securely on a blockchain, they become tradable assets, creating a whole new market in the process. The technology available allows risk algorithms to be performed on the financial status of the company, which scores each on the basis of its credit history and other parameters. Any company with a proven track record of good performance will be entitled to additional benefits, and so is incentivised to keep their financials on the blockchain.
What are the other benefits?
But that’s not all Hive Project does. The benefits of blockchain extend far beyond their many positive effects on invoice financing. We also provide extra services for companies who are looking to make their financials more transparent, along with their business generally. Financial items can be uploaded to the blockchain at any time, with a time stamped record of every transaction made. It would then of course be completely up to the client as to how much information is exposed to the counterparty, with the data level controlled by the company’s private keys. The benefits here include increased transparency, access to faster credit scoring and the potential for getting instant credit when it’s needed.
The benefits are clear. We know exactly how the market behaves. Who’s paying. Who’s not. Using this data as a basis, we can create a real-time credit scoring system for SMEs and make it available to the market.
What does the future hold?
The long-term effects are clear. Once a company establishes a working relationship with a blockchain platform such as Hive Project, it is likely to then consider publishing its regular day-to-day cash flow operations in order to get a better credit score. This also makes sense from an investment perspective. Investors currently have to rely on quarterly reports which are often outdated by the time they are published. However, any savvy investor would be much more inclined to invest in a company which can produce real time financial activity as opposed to a company providing only delayed quarterly data. This would mitigate risk premiums significantly, cutting the cost of finance, making the process much quicker and effective in the process. Anyone not choosing to go down this route would soon be at a clear disadvantage.
In the bad old days of the old economy, any profits made from invoice financing were reserved only for big business. But Hive Project is set to change all this. By decentralising the system, all Hive Project investors and stakeholders now have the opportunity to benefit.
Those bad old days are over. Join us as we help make the new world of finance that much easier, brighter and more transparent for small businesses.
Interested? More info's available on Hive Project´s website: https://www.hive-project.net
