System Analysis of the Business Debt Financing Process Using the Functional Approach
(Pages 145-154)Olha Kots1,*, Pavlo Ilchuk2, Lesia Danchak3 and Yurii Veres4
1Department of Finance, Lviv Polytechnic National University, Stepana Bandery str. 12, Lviv, 79013, Ukraine;
2Department of Project Management, Lviv Polytechnic National University, Stepana Bandery str. 12, Lviv, 79013, Ukraine;
3Department of Business Economics and Investment, Lviv Polytechnic National University, Stepana Bandery str. 12, Lviv, 79013, Ukraine;
4Department of Information Systems and Networks, Lviv Polytechnic National University, Stepana Bandery str. 12, Lviv, 79013, Ukraine
DOI: https://doi.org/10.55365/1923.x2025.23.14
Abstract:
The modern business environment necessitates the effective management of financial resources, with debt
financing serving as a critical tool for raising capital and ensuring sustainable business growth. This study explores the decision-making process for business debt financing using the IDEF0 functional modeling approach, which provides a structured and systematic way to analyze financing decisions. The IDEF0 methodology involves the construction of a hierarchical system of diagrams, wherein each diagram offers a single description of a business process fragment. The initial step involves a comprehensive description of the business process, encompassing its intricacies
and its interactions with the external environment.
The proposed framework decomposes the financing process into four main stages: assessing the necessity of debt financing, developing a financial plan, raising debt financing, and monitoring the fulfillment of debt obligations. The application of the IDEF0 model enhances strategic financial planning, ensuring that businesses adopt rational borrowing policies aligned with their long-term objectives.
In the research, the alternative options for raising debt financing for businesses were systematized. Decision-making parameters for choosing the option of raising debt financing for business were determined.
The findings contribute to improving financial management efficiency by offering a methodological basis for digital financial models that integrate data analytics, risk assessment tools, and automated decision-making mechanisms. This research is valuable for corporate managers, financial analysts, and policymakers aiming to enhance business resilience, optimize capital structures, and develop effective debt management strategies in an increasingly uncertain economic environment.
Keywords:
System analysis, business process modeling, IDEF0 methodology, decision-making, debt financing.
How to Cite:
Olha Kots, Pavlo Ilchuk, Lesia Danchak and Yurii Veres. System Analysis of the Business Debt Financing Process Using the Functional Approach. [ref]: vol.23.2025. available at: https://refpress.org/ref-vol23-a14
Licensee REF Press This is an open access article licensed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, provided the work is properly cited.