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SME cybersecurity problems and how to finance the fix

Cyber criminals are increasingly targeting small businesses. One of the factors behind this trend is the cost of strengthening cybersecurity systems. Alternative finance can help these businesses better protect themselves and their customers.

According to a new study from cybersecurity firm Malwarebytes, the number of cyber threats to businesses has risen by a staggering 235% in the last 12 months. Notably, the report says that small firms are the most at risk. Another survey, this time from Beaming, found that the percentage of small businesses reporting a cyber-attack rose to 63% in 2018, compared with 47% in 2017.

These figures are alarming not least because the impact of a cyber-attack on a small business can be catastrophic. The Beaming study claims that the average cost of a cyber-attack is £65,000, with salvaging damaged assets, paying financial penalties and business downtime the major items on the bill.

The growing number of cyber-attacks on small businesses can be attributed, partly at least, to how these firms use digital technology and in particular the way in which they access data from the cloud from multiple locations. Greater flexibility and efficiency are the benefits of this way of operating, but it comes with cybersecurity risks.

However, the trend can also be linked to the costs of strengthening cybersecurity: new software and hardware and staff recruitment and training come with a significant price tag. And with current market conditions stretching margins to breaking point, many firms are limited in terms of how much upgrading of cyber-defences they can do.

So, how can small businesses afford the cyber-security that they need? Alternative finance can help.

In the wake of prolonged caution from traditional lenders, which has only been reinforced by the economic uncertainty caused by Brexit, services such as invoice finance, asset finance, peer-to-peer lending and crowdfunding are providing small business owners with an alternative means of accessing capital to maintain cashflow and fund essential investment, such as in stronger cybersecurity.

This is how a Sussex small business used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital to invest in new equipment.

Furthermore, investing in stronger cybersecurity systems is about more than better protecting company and client data. It is also fast becoming essential to business development because more and more large firms are demanding specific levels of cybersecurity before signing contracts with smaller companies.

The pressure on small businesses to properly safeguard data and systems has never been greater. Owners have to invest. To be able to take this step, they need to be aware of all the funding options available to them, including alternative finance.

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

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