Much is expected of Industry 4.0 and the next phase in the digitalisation of the business sector. Some are touting it as an economic saviour. But new tech comes with a price tag. How can cash-strapped SMEs afford it?

While a lot of discussion around Industry 4.0 is focused on whether robots will take human jobs, the ongoing development of digital technology and its role in the workplace has much wider parameters. It’s perhaps more helpful to think of it in terms of greater connectivity and new forms of human-machine interaction, and the efficiencies and opportunities this kind of progress can create.

And the chance to benefit from greater efficiencies and exploit new opportunities is one that under-pressure small business owners are certainly interested in. However, they’re also aware of the costs involved in swimming with this digital tide. There may be the likelihood of more sales and stronger profits down the line, but this journey requires investment.

It’s not just about investing in new equipment and software. Talk of Industry 4.0 and enhanced digital connectivity brings with it the necessity of appropriate levels of cybersecurity and data protection, the demands of which small business owners know all about. And let’s not forget that there’s the absolute need for a reliable high-speed broadband service, something which not all small businesses can rely on.

Stepping outside the tech circle, small businesses are also burdened with a raft of other policy and non-policy costs. Business rates, late payment and compliance with national living wage and pension auto-enrolment legislation are all issues that have an impact on company finances.

So how can small business find the capital to embrace the opportunities of Industry 4.0? Alternative finance has a role to play. SMEs are increasingly using services such as invoice finance, asset finance, peer-to-peer lending and crowdfunding to safeguard cashflow and fund development. While traditional lenders are beginning to re-engage with small businesses, attitudes remain cautious, and alternative finance is providing these firms with services that offer much-needed accessibility, affordability and flexibility.

This is how a business in Sussex used peer-to-peer lending, through a commercial finance broker than specialises in alternative finance, to raise the money to buy new equipment.

And new equipment, as I’ve said already, is exactly what many small businesses need if they are to benefit from this latest industrial revolution. To take this step, SMEs need access to finance and in today’s climate, this strategy has to include alternative finance.

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