Small businesses are under attack from cyber-criminals more than ever before. But at the same time, firms are struggling to protect themselves, with cost a key barrier. How can companies afford to invest?

Why cyber-criminals are targeting SMEs

While high-profile attacks against large organisations grab the headlines, the threat posed by cyber-criminals to small businesses has been growing sharply in recent years, with these firms particularly vulnerable. Recent studies show how great the risk for small businesses has become.

According to new data from Trend Micro, ransomware gangs are increasingly targeting SMEs with under 200 employees. Over half of the victims of attacks in the first half of the year were smaller businesses. One of the main reason for the uptick in this activity is that owners and employees are more likely to pay up without any fuss.

New research from Sharp paints a similar picture. According to the study, around one third of SMEs have had their operations affected by a cyber-security breaches, with the most common being phishing and malware attacks, as well as data loss and computer virus attacks. Notably, almost 40% of businesses are more concerned about cyber-security than in 2022.

What is stopping SMEs investing in cyber-security?

These figures highlight the growing pressure SMEs are under from cyber-criminals, but this is not a new threat, so why aren’t these businesses better protected? A lack of preparedness is a prominent trend, with this status rooted in a lack of awareness and education, and the cost of upgrading protection.

A new survey from Cowbell reveals that 75% of SMEs are at risk of a cyber-attack because of inadequate risk prevention frameworks, with more than three quarters of management expressing doubts over the ability of their teams to operate devices in a secure manner. Furthermore, this research showed that almost 80% of management would struggle to confidently identify a cyber-attack in the workplace.

Tellingly, almost two thirds of small businesses surveyed by Sharp said that they wouldn’t be increasing their IT security budgets in 2023. This comes despite the trends in SME cyber-attacks and the risk they pose to company brands and operational ability.

SME cyber-protection and how alternative finance can help

It is understandable that small businesses are finding it hard to allocate more money to cyber-protection at a time when the market is battling serious headwinds and there are demands on cashflow and capital coming from all sides. But firms have to invest. Alternative finance can help.

Services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses in the current funding climate (with 65% more SMEs experiencing difficulty in accessing finance from high-street banks as of August 2023).

These alternative finance facilities, which offer a more easily accessible, affordable and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth. Notably, alternative lending played a prominent role in the government’s headline emergency support schemes.

This profile has helped cement the reputation of alternative finance in the business sector, with a new study showing that more than 50% of small businesses are looking to use finance to achieve growth in 2023.

SME finance options for cyber-security

Cyber-attacks are a serious threat to SMEs – in terms of both reputational and financial damage. And cyber-criminals are increasingly targeting these firms because of their inadequate protection.

Businesses have to find the money to invest in strengthen security systems. This is why it is vital that owners and managers are aware of all the finance options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.