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How SMEs can manage additional cybersecurity costs

The pandemic has brought the issue of business cybersecurity into sharp focus and small firms are the most vulnerable. However, while awareness of the problem is growing, action to strengthen protection is not moving at the same pace. What is causing the disconnect?

Two recent news reports underline the threat that cybersecurity poses to small businesses. Firstly, data from the 2021 Cybersecurity Census Report show that the retail sector is facing one cyberattack every eight days. Secondly, research from Avast shows that employees at almost a third of SMEs are connecting to corporate network using personal devices that do not have the same level of security as workplace equipment.

The risk relating to such attacks are significant and are amplified for small businesses that don’t have the resources to repair the damage in the same way and at the same rate as larger organisations. The costs relating to cyberattacks can be large, with disruption to trading, supply chain management and customer operations. It is not an exaggeration to say that attacks can put smaller firms out of business.

What is stopping SMEs from beefing up cybersecurity?

Looking at cybersecurity-led development in the small business sector, there is a clear gap between awareness and action. For example, over 40% of those interviewed for the Cybersecurity Census Report said IT had been a top priority over the last year, however, research from Checkpoint revealed that despite this awareness, cyber budgets fell during the pandemic, with over half of organisations pausing or decreasing spending.

Furthermore, GlobalData research showed that while an increase in remote working has led to a notable uptick in the purchase of cyber-insurance by SMEs, less than a third of these companies have this cover in place. These findings come as an increase in cyber attacks is forecast and experts warn companies to improve their cybersecurity.

So, what is causing the disconnect? Two clear reasons are emerging: a lack of confidence in developing cybersecurity frameworks and the cost involved in doing so. That cost is a barrier, in particular for smaller firms, comes as little surprise as businesses battle to stay afloat in the post-lockdown marketplace and manage the assorted pressures on cashflow and capital resources, such as rising energy costs, supply chain problems, tax rises and COVID-19 loan repayments.

What’s the solution? How can small businesses afford the cybersecurity they need? How can they manage the impact on their finances? Awareness of all SME finance options available is critical, including alternative finance.

Protecting against cyberattacks and how alternative lenders can help

With regard to alternative finance, in the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic, services such as invoice finance, asset finance and peer-to-peer lending, are proving a vital source of capital for small businesses, both for maintaining cashflow and for essential investment.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery and regrowth.

Furthermore, alternative lending is playing a prominent role in the government’s headline emergency support scheme, the Recovery Loan Scheme (open until the end of June 2022). Invoice finance and asset finance between £1,000 and £10 million per business are available under the initiative. This profile is helping cement the reputation of alternative finance in the business sector.

Strengthening cybersecurity and SME finance options

While small businesses are battling strong headwinds and managing an array of costs, it is essential that they find the resources to ensure they have a strong level of cybersecurity. To be able to take this step, business owners need top approach financial planning with a knowledge of all the finance options available to them, including the services of alternative lenders.

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

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