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How small firms can afford to close the cyber protection gap

Cyber-attacks continue to be a major threat to small firms. Recent attacks and new data on small business cyber-safety show that these companies need to do more to protect themselves. The big question is, how can they afford it?

New cases underline small business vulnerability to cyber-attacks

KP Snacks is one latest victims of a cyber-attack, with its IT and communication systems crippled as a result. The fallout is significant supply chain disruption and the potential shortage of Hula Hoops, KP Nuts, McCoy’s and other KP snacks has made the incident national news.

At the same time, out of the spotlight, thousands of self-employed workers have gone unpaid for weeks as a result of a cyber-attack on payroll firm Parasol. The attack has had a major impact on the operational viability of Parasol and its reputation is suffering as a result.

The recent cyber-attack cases underline the prevalence of this sort of incident and the damage it can do. However, it is notable that the much larger KP Snacks is better positioned to manage the impact. Small firms are highly vulnerable to cyber-attacks and these companies with less protection are increasingly becoming targets for cyber-criminals.

Why small firms are struggling to strengthen cyber-security

Of course, there is awareness of the need for strengthening cyber-protection in the small business sector, but steps aren’t being taken with the necessary urgency. According to new data from Software Advice, while two thirds of SMEs have reported an increase in cyber-security threats in the last two years, half of these firms do not provide cyber-security training.

One of the main barriers to small firms in terms of putting in place better cyber-security is cost. System reviews, new software and hardware, insurance plans and training all come with a significant price tag and in today’s challenging marketplace, where the focus is on survival and safeguarding under-pressure cashflow, there is a little spare cash to invest.

How can small firms afford critical cyber-protection? Alternative finance can help.

Cyber security costs and how alternative finance 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.

Business cyber-protection and SME finance options

With small firms carrying the burden of heavy Covid-19 and Brexit-related costs, it is understandable that finding capital to invest in strengthening cyber-security is difficult. But it is something that they must do. As such, it is important that owners and directors are aware of all small business finance options, from governmental support schemes and traditional institutions to the services of alternative lenders.

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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