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How SMEs can manage rising cybersecurity costs

Small businesses are having to invest more and more in cybersecurity as the threat of attack continues to grow. So how can SMEs manage yet more pressure on cash flow? Alternative finance has a role to play.

According to a new government survey, the Cyber Security Breaches Survey, which has been endorsed by the CBI and Federation of Small Businesses, two thirds of large companies in the UK were hit by a cyber-attack in 2015. It also pinpointed weaknesses in cybersecurity at SMEs, in particular with regard to setting cybersecurity standards for suppliers (only 13% of companies doing so).

Given the damage a cyber-attack can do (the average cost of a cybersecurity breach? £3,480, with the figure rising to £36,500 for larger firms), companies have little option but to invest in protection and that affects cash flow.

For example, Bacs Payment Schemes Limited is launching new internet security software in June (SHA-256 SSL and TSL1.1/1.2) because of the vulnerability of its existing software. While payment security is obviously important, upgrading systems comes at a cost. Furthermore, if companies don’t upgrade, they won’t have access to Bacs payment services, which for those firms that rely on these services is something that they can’t allow to happen.

So how do SMEs manage these costs at the same time as meeting the demands of pension auto enrolment, the National Living Wage, etc.? Alternative finance is part of the solution. In today’s environment, access to finance is critical and services need to be affordable, flexible and transparent. This is where the likes of invoice finance and asset finance comes in. With traditional lenders still proving cautious, a small business financial strategy has to include alternative finance.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

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