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This is how SMEs can fund GDPR compliance

The GDPR deadline is less than 100 days away and small businesses are unprepared. Why? Cost and the impact on cashflow is a factor. Alternative finance can help SMEs afford compliance.

If the subject of GDPR was hard to avoid in the second half of 2017, it has been almost impossible to miss in 2018. However, despite the steady flow of articles, posts, seminars and presentations, a new report by the Federation of Small Businesses has revealed that over 50% of the companies that it questioned had either yet to begin preparing for the new legislation or were only in the early stages of ensuring compliance. Less than 10% of companies were ready. Businesses that don’t meet the deadline face the prospect of fines.

Clearly, awareness of the new data protection legislation isn’t an issue, so what is slowing so many small businesses down? The cost of reviewing and upgrading systems has to be a key factor. At a time of challenging market conditions – something underlined by the news that Toys R Us and Maplin are the latest high-street stores to go into administration – and when businesses face a range of other policy and non-policy related costs, finding the money to finance GDPR compliance just makes the balancing act even harder. It’s no surprise that so many SMEs aren’t prioritising it.

So how can small business owners afford the resources to ensure that their systems are aligned with the new legislation by 25 May? Alternative finance can help raise the capital to safeguard cashflow and facilitate investment. Whether used in a stand-alone capacity or as part of wider finance strategy, the likes of invoice finance, asset finance and peer-to-peer lending offer crucial accessibility, affordability and flexibility.

More and more businesses are using these services. According to a new report from the British Business Bank, while bank small business lending was flat in 2017, the use of asset finance rose by 12% and peer-to-peer lending by over 50%. The figures clearly suggest that SMEs are increasingly looking beyond traditional lenders and diversifying their funding sources.

This is how a company in West Sussex used peer-to-peer lending, organised by a commercial finance broker that specialises in alternative finance, to raise £20,000 to buy new equipment.

While the introduction of GDPR is necessary and brings important protection, its timing is difficult for small businesses. For many, it’s putting more pressure on finances that are already stretched to the limit. Alternative finance can help SMEs ensure compliance and safeguard cashflow.

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

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