Warnings about cyberthreats are far from new, but it is becoming increasingly clear that small businesses are struggling to properly protect themselves and their clients, with affordability a key issue. Alternative finance can help.

According to new research from Appstractor, presented in its report “Under Attack: Assessing the struggle of UK SMBs against cyber criminals”, less than half of the IT decision makers surveyed said that they could properly protect their companies against cyberattacks using current software and systems. Furthermore, the research also showed that small businesses faced on average five cyberattacks over the last 12 months, with almost a fifth having to deal with twice as many.

One of the key factors behind small business struggles with cybersecurity is the sheer range of threats that they must contend with. Attacks come in the form of malware, ransomware, cryptojacking, data breaches, phishing and impersonation fraud, to name but a few. Recent research from Lloyds Bank underlines the scale of the problem. According to the study, over 450,000 SMEs in the UK have fallen victim to impersonation fraud in the workplace. Tellingly, almost 40% of employees admitted to not knowing what to look out for or having no security measures in place.

And cybercriminality is a challenge that is here to stay, for the short term at least. The switch to a cashless economy, the arrival of Industry 4.0 and the Internet of Things and the growing popularity of cryptocurrencies will only magnify the focus on cybersecurity. According to Juniper Research, the number of records stolen by cybercriminals will reach 33 billion in 2023, a 175% increase over the estimate for 2018. Its new report also highlights the vulnerability of small businesses to these threats; these companies account for just 13% of the cybersecurity market in 2018, despite the fact that the vast majority of firms are small businesses.

While a lack of specific SME-focused cybersecurity services is a factor behind the sector’s struggle to put in place adequate protection, affordability is at the heart of the issue. Finding the financial resources to combat cybercriminality is a major challenge at a time when deepening uncertainty surrounding Brexit is affecting market performance and small businesses must manage a daunting range of policy and non-policy costs.

So, how can small businesses manage the costs of cybersecurity? Alternative finance has a role to play.

With high-street lenders remaining cautious when it comes to SME lending, the likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding are offering small business owners an alternative means of accessing essential funds. News that SMEs have netted more than £15 million from alternative finance sources through the government-mandated Bank Referral Scheme illustrates how the role of non-bank finance is continuing to grow.

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

It’s clear that the market is evolving in a fashion that will put an ever greater focus on cybersecurity. So, it is vital that SMEs have the appropriate level of protection in place. For this to happen, business owners have to be aware of all the finance services available to them, including alternative finance.

Want to know more about what A&T Business Associates can do for your business? Contact Tony on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.