Cybercrime cost businesses billions in 2023 and the bill is forecast to be even larger in 2024. Small firms are highly vulnerable to attacks, with criminals exploiting inadequate cyber-defences. How can these companies afford to strengthen their cyber-protection?

According to new research from Beaming, cybercrime cost businesses more than £30.5 billion in 2023, with the number of breaches rising by over 40% compared to 2019. The average cost of an incident was estimated at £5,500.

These are shocking figures and the bad news is that things are expected to get worse. Analysis from TechRadar suggests that more cyberthreats will emerge in 2024 and that small businesses will be on the frontline.

Why are smaller firms being targeted by cyber criminals?

The main reason for this development is the level of cyber-security these firms have in place. While large companies have more capacity to put extensive protection systems in place, smaller firms lack the resources to do so. Data from a new report from Sophos underlines the risk for small businesses.

According to the study, over three-quarters of cyber incidents involved small firms in 2023, with attacks becoming increasingly sophisticated. The most common form of attack was the use of ransomware leading to data or credential theft.

What is behind small firm cyber-attack vulnerability?

The data for 2023 and forecasts for 2024 paint an alarming picture. However, these trends are far from new. Many smaller firms have found it difficult to prioritise cyber-security, with this inaction undoubtedly contributing to the sector’s vulnerability. One of the major factors is cost.

Upgrading cyber-defence systems comes with a significant bill, whether it’s investing in new technology, infrastructure reorganisation or staff training. And given the current climate, it is hardly surprising that under-pressure smaller firms are proving hesitant in committing big sums in this area.

Cyber-defence spending and how alternative lenders can help

While balancing the need for investment with safeguarding cash flow has rarely been so difficult, for many firms, stronger cyber-protection is clearly a must. How can they manage it? 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). 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.

This profile has helped cement the reputation of alternative finance in the business sector. According to the British Business Bank, it is alternative lenders that are increasing filling the small business funding gap, with asset finance alone rising by 7% to £23.5 billion in 2023. At the same time, a 2024 study shows that more and more SMEs are turning to alternative lenders to access larger-scale finance packages.

Small firm finance options for cyber-security investment

The need for smaller firms to beef up their cyber-security systems is a not a new warning, but as new studies show, the situation is urgent. While the current economic climate makes investment challenging, action is required. This is why it is important that businesses are aware of all the finance options available, 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.