As the recent Marriott data breach illustrates, cybersecurity remains a problematic issue for businesses. And small businesses are particularly vulnerable, largely because of cost. Alternative finance can help these firms afford better cybersecurity.

According to news reports, personal data including credit card details, passport numbers and dates of birth of as many as 500 million people has been stolen in an extraordinary hack of Marriott International systems. Marriott International is the parent company of hotel chains such as Le Méridien, Sheraton, W and Westin. The impact on the corporation has already been significant, with reservations affected and lawsuits filed.

It is clear that businesses of all sizes are struggling to cope with the threat, but small businesses are especially easy prey. Juniper Research estimates that over 33 billion records will be stolen by cybercriminals in 2023 alone, a rise of 175% over the 12 billion records stolen or compromised in 2018. Its study also shows that spending by small businesses on cybersecurity remains relatively static despite legislation such as GDPR and the risk posed by cyber attacks. Tellingly, new research by Email Verifier has found that less than 40% of SMEs in the UK believe that they are GDPR compliant, thanks in part to confusion over the impact on their marketability.

The growing popularity of the voice and video telecommunication technology, the greater use of Cloud computing and a growing trend for bringing your own device to work are some of the main reasons behind the prevalence of cyber attacks. According to a study by Datto, ransomware continues to be one of the most prevalent forms of attack experienced by small businesses despite the operation of anti-virus software. Furthermore, the research shows that the downtime resulting from an attack is of greater cost to a business than the amount of the ransom.

One of the main reasons why small businesses are dragging their feet is cost. Challenging market conditions and a range of policy and non-policy costs are squeezing already thin margins and as a result, many of these firms are finding it difficult to access the funds to invest in a significant cybersecurity upgrade.

This is where alternative finance can help. In the face of prolonged caution from high-street lenders – and a new report on SME access to finance has revealed that almost half of small firms are declined by these lenders – the likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding are providing small business owners with an alternative means of raising capital for essential investment, such as in cybersecurity.

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 money to buy new equipment.

Alternative finance can help small business owners afford to take a new approach to cybersecurity, overhauling and upgrading systems, creating a stonger, company-wide culture of security and better protecting their data and that of their customers.

The importance of cybersecurity to a small business cannot be understated, both in terms of stopping attacks and marketability to customers. For these businesses to invest in stronger cybersecurity, they will need to make use of all the financing channels available to them, including alternative finance.

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