Cybersecurity is back in the news. The IAAF and the ABTA have both recently suffered major attacks. But it isn’t big organisations that are the most vulnerable, its SMEs. And alternative finance can help defend them.

How can alternative finance help protect small businesses against cyber-crime? It all boils down to money. One of the main reasons why SMEs are easier prey for hackers is budget. At a time when small business capital and cashflow is under attack from demands relating to pension auto-enrolment, the living wage and apprenticeships, and Brexit-born market headwinds, the capacity to defend against cyber-criminals is limited. And it shows.

Insurer CFC Underwriting recently reported an almost 80% rise in cyber-security claims in 2016, with the vast majority made by SMEs. The company’s report also revealed that over a quarter of SMEs in the UK are failing to educate their staff about the threat of a cyber-attack. With phishing scams responsible for over a third of claims, it is clear that a little training could go a long way.

The cost of a security breach for a small business? Anything between £35,000 and £180,000. In the current climate, it’s no exaggeration to say that such sums can be the difference between life and death for these firms. Cyber-attacks drain resources that small businesses cannot afford to spare and ruin relationships that they cannot afford to lose. And it is affordability that is a major issue. This is where alternative finance comes in.

Cybersecurity is an investment and with traditional lenders remaining cautious with regard to access to SME lending, it is investment that is hard to fund. Yes, improvement is required from the cybersecurity industry in terms of its service and charges, but the onus still lies firmly with small business owners. Alternative finances services such as invoice finance can give these owners with greater flexibility in terms of cashflow management and help them better protect their businesses.

Effective cybersecurity shouldn’t be beyond small businesses. Achieving this goal is far from easy, and a big challenge is affordability and access to finance. As such, looking at the state of the market, to ensure sufficient funding, it is clear that alternative finance has a key role to play in facilitating liquidity for SMEs and helping them defend against cyber-crime.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.