Shocking new figures on the cost of cyberattacks to small businesses underlines the severity of the threat that they face. However, investment remains underwhelming. What is stopping firms and how can find a solution to this problem?

The eye-opening findings of new research from Vodafone Business, on the financial toll of cyberattacks on small businesses, are enough to stop firm owners in their tracks. According to the study, the damage done by cyberattacks is costing small businesses a staggering £3.4 billion every year.

Breaking down the data from the Securing Success: The Role of Cybersecurity in SME Growth report, the average cost of a cyberattack for a small firm is just under £3,400, with the bill rising to slightly over £5,000 for businesses with a workforce of over 50 employees.

The rising incidence of cyberattacks on small firms is also noted in the study, with the number growing significantly in recent years: over a third of businesses were hit by at least one attack in 2024, while over a quarter were victims of between one and five attacks.

Why are small firms reluctant to spend on cybersecurity?

The study from Vodafone presents yet further evidence of the growing threat posed by cyberattacks to small businesses. Tellingly, it also highlights again the reasons for firms’ vulnerability.

According to the report, over half of small firm employees have received no cybersecurity training, with almost a third of firms having no cybersecurity protections in place. With regard to investment, nearly 40% of businesses spend less than £100 per year on cybersecurity.

What is holding back firms when it comes to investment?

A major barrier is cost. Small businesses are battling the impact of long-term austerity, under intense pressure from various severe market headwinds. The ongoing tariff tornado from the US suggests that conditions won’t be improving any time soon.

Investing in cybersecurity and how alternative finance can help

Against this backdrop, it is hardly surprising that businesses are proving reluctant to increase investment. Spending on new systems and staff training while safeguarding cash flow is highly challenging in the current environment.

This is where alternative finance can help.

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 cybersecurity strengthening

It is undoubtedly hard for small businesses to invest in development at the moment, given the pressure on cash flow from assorted sources and the general state of the market. However, the increasing threat of cyberattacks can’t be ignored and investment is a must.

As such, with traditional banks still proving cautious in terms of small business lending, it is vital that key decision-makers 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.