New year, same cyber-security problem? Yes and no. The issue remains a pressing one for small businesses, but the threat it poses to firms looks set to grow significantly in 2025. The big question is – how can businesses finance investment while safeguarding cash flow?

Nothing stands still and this includes the risks for small businesses related to cyber-attacks. As businesses get started on a new year, no reminder of the danger posed by cyber-criminals is needed – this was a key theme in 2024. However, cyber-attacks are becoming more sophisticated and this is an evolution that firms need to be prepared for.

Cyber-threats that small firms have to face in 2025

Looking ahead, cyber-security risks are reportedly set to develop in a number of ways. This includes the use of AI-enhanced attacks and ransomware-as-a-service, and the greater exploitation of cloud vulnerabilities and weaknesses relating to operating technological environments.

There is also the issue of cyber-related dangers related to geopolitical developments, both in terms of the need to ensure service and infrastructure resilience in an increasingly fraught environment and the involvement of key tech industry figures in national and international politics.

The new cyber-security threats are relevant to all businesses, but there is a particular urgency for smaller firms because of their greater vulnerability to attacks, which has been related, in part, to subdued levels of investment in strengthening protection. With cyber-attacks becoming smarter and their impact becoming more and more harmful, there is an obvious imperative for small businesses to invest.

Investing in cyber-security and how alternative finance can help

If the need for small firms to increase spending on cyber-security is clear, so then is reason why investment has been sluggish – the cost. For all the talk of growth, economic conditions remain downbeat and the market continues to very challenging for small firms. Safeguarding cash flow while finding capital for investment remains a hugely difficult balancing act.

This is where alternative finance can help.

While there was some improvement in the second half of the year, small business lending from traditional sources remains subdued, with 65% more SMEs experiencing difficulty in accessing finance from high-street banks. As a result, alternative lenders have become increasingly embedded in the small business finance landscape.

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. 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, the Growth Guarantee Scheme is providing 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 firm finance options for cyber-security investment in 2025

Against the backdrop of continued domestic economic malaise and the prospect of greater geo-political instability, it doesn’t look like 2025 is going to be any easier for small businesses. Nevertheless, firms have to position themselves as strongly as possibly, including ensuring that they are properly protected against cyber-attacks.

Such investment isn’t easy in the current climate and this is why is important that key decision-makers are aware of all the finance to 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.