Development and reporting around cyber-security is strongly focused on larger firms and national infrastructure, while the vulnerable small business sector is often overlooked. Nevertheless, better protection is required across the board. How can small firms afford it?

Cyber-security is back in the news after high-profile cyber-attacks on Network Rail and TfL, with a focus on the impact of such acts on customers, employees and businesses. The data of around 5,000 TfL customers were accessed following a cyber-security incident in September, while in the same month, the Network Rail public WiFi system was hacked at stations across the country.

The companies have acted to remedy the situations, but the attacks are a reminder of the damage that can be done, financially, operationally and in terms of reputation. And, while larger firms have the resources to take such incidents in their stride, the stakes for small businesses are much higher.

Why is stronger small firm cyber-security important?

Notably, recent discussion around the new Cyber Security and Resilience Bill has highlighted that smaller businesses often have in place only a basic level of cyber-protection despite playing a key role in national supply chains. For this reason, there is growing pressure to focus development of the Bill on making systems and support more accessible for small firms.

The greater consideration of small business sector needs is hugely important, not only because of the potential impact of national supply chains, but also of the consequences for the firms themselves. The average cost of a cyber-attack on small firms is a topic that has been well covered – while it varies, it is always significant – but new research has underlined what incidents can mean for staff.

According to a new survey from Databarracks, job losses as a result of cyber-attacks are becoming increasingly common, with IT and security staff often in the firing line. Also, the disruption caused by these malicious incidents is also leading to wider layoffs. Rolling with these punches is a massively challenging process for small firms.

Funding cyber-security investment and how alternative lenders can help

Of course, the obvious question when it is reported that smaller firms operate only minimal cyber-protection is, “why don’t they improve it?” One of the most common answers is cost. And this is hardly surprising given the state of the market – while talk of recovery is consistent, the process is proving slow.

That said, smaller firms can’t afford not to invest – not least because of increased expectations around protection. It is becoming more and more common for larger firms to demand a high level of cyber-protection as a precursor to doing business with smaller companies. So, how can small firms find the capital while managing cashflow?

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. Notably, the new Growth Guarantee Scheme will provide a wide range of finance facilities to smaller firms, including asset finance, invoice finance and asset-based lending. This is further proof that alternative lenders are increasing filling the small business funding gap.

Small business finance options for spending on cyber-security

The recent Network Rail and TfL cyber-attacks are a reminder, if one was needed, that resources are integral to managing such threats and that smaller businesses are still acutely exposed. The Cyber Security and Resilience Bill is being touted as the answer, but with the focus currently on national infrastructure, it could prove of little help to small firms, and even increase the burden on them.

As such, it is vital that small businesses invest in strengthening their cyber-security systems, both in terms of training and software. And this requires finding capital at a challenging time. This is why it is important that businesses 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.