How small firms can afford to target new AI plan gains
The government is going all in on the potential of AI. But what does the ambitious multi-million pound plan mean for smaller businesses? The benefits are being made clear, but what about the costs? How can firms manage to invest?
The plan seems clear: make the UK a leading European destination for AI businesses, and it is hard to argue with the thinking. If the plan is successful, it will generate vital growth and wealth, giving the national economy a much-needed shot in the arm.
Of course, whether the AI Opportunities Action Plan brings home the bacon remains to seen. But widespread adoption is going to pushed. Naturally, the advantages for businesses are being highlighted, and there is certainly potential and reason for optimism.
What does the AI Action Plan mean for small firm cash flow?
However, this AI-led development comes with a price tag and while the government has committed to significant investment, businesses will have to shoulder some of the burden themselves. For larger businesses, the process is likely to much smoother, but for smaller ones, the onus could be much greater.
There will need to be investment in systems, software and training as well as recruitment, and while economic conditions remain subdued, this represents a challenge, even if the government intends to share the burden.
It is also worth noting the role of AI in the expansion of cyber-security related risks and what the increase in use of AI in some fields means for intellectual property protection and the use of protected property and materials. The pathway isn’t perhaps as smooth as some consider.
Investing in AI adoption and how alternative finance can help
For all the fanfare around the AI Opportunities Action Plan, it is understandable that smaller firms may be a little hesitant to embrace the strategy, or at least the prospect of having to invest and manage the impact of this spending on already under-pressure cash flow.
How can afford to invest, while safeguarding cash flow? This is where alternative finance can help.
While there was some improvement in the second half of 2024, coming into 2025 small business lending from traditional sources remains subdued, with 65% more SMEs experiencing difficulty in accessing finance from high-street banks. As a result, alternative lenders have become increasingly embedded in the small business finance landscape.
Services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses in the current funding climate. 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, the Growth Guarantee Scheme is providing a wide range of finance facilities to smaller firms, including asset finance, invoice finance and asset-based lending. This is further proof that alternative lenders are increasing filling the small business funding gap.
Small firm finance options for AI investment in 2025
Whether being so bold in embracing AI on such a scale is the right strategy is matter for debate, but it’s role is certainly set to grow and it is important that smaller businesses find a way to keep pace with AI adoption as part of wider workplace tech development.
And this means while the economic climate and the market remain challenging, investment will be necessary. This is why it is important that small firm decision-makers are aware of all the financial options available to them, including 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.