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How small firms can afford to embrace AI

Everyone’s talking about AI, or so it seems. The business world has been abuzz with speculation and analysis, but now, as the dust begins to settle, the big question for small firms is, how can we make it for work us and how can we afford it?

While there has been plenty of chat about what AI means for businesses, including concern with regard to certain employee groups, it has become clear that it offers notable benefits in a wide range of areas, from sales and marketing and customer support to human resources and accounting.

For example, small businesses can use AI to carry out mundane tasks quicker, to make analysing data easier and to avoid human error in key processes. By doing this and more, AI can allow teams and owners to spend more time and resources on higher-value tasks. It can be used as a tool to boost productivity, target greater cost efficiency and drive growth.

Of course, how firms integrate AI into their operations is critical (and it is a case of businesses finding the optimal way of using this technology rather than the technology taking over Terminator style). Such development requires investment – in structures, systems, strategies, training, etc. – and this costs money. And this is a barrier for small businesses.

Rolling out AI and how alternative finance help

While AI may offer groundbreaking development, the current climate makes investing in this emerging technology far from straightforward. Profit margins are under huge pressure thanks to spiralling costs, so any reluctance to increase spending is completely understandable. However, greater use of AI is the future and the benefits it offer could prove critical for many firms. How can they afford it? Alternative finance can help.

Services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses in a funding climate characterised by prolonged caution from traditional lenders. Indeed, the issue has returned amid highly challenging post-Covid-19 market conditions, with bank loans to SMEs falling by £14 billion in the year to March 2023.

These alternative finance facilities, which offer a more easily accessible, affordable and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth. Notably, alternative lending played a prominent role in the government’s headline emergency support schemes.

This profile has helped cement the reputation of alternative finance in the business sector, with a recent study showing that more than 50% of small businesses are looking to use finance to achieve growth in 2023.

AI investment and small firm finance options

There is growing recognition that AI is something to be embraced and employed rather than feared, and its place in the small business landscape looks certain to grow going forward. As such, it is important that firms position themselves to benefit from this advance. This is why it is crucial that businesses are aware of all the funding options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.

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