It hardly needs restating how transformative AI is proving for businesses. But to enjoy the benefits, firms need to know who to use it and this is an issue for SMEs. How can these under-pressure firms afford to invest in AI training?

The AI carrot is big. According to research from the University of St. Andrews, adopting AI could boost the productivity of SMEs by as much as 133%. Even if the level of benefit varies between sectors, the advantage is universal – the incentive to integrate AI into operations is clear.

However, not all businesses are positioning themselves to gain these benefits, with small firms in particular dragging their heels when it comes to adopting AI. According to a survey of SME leaders, less than 30% of small businesses can embrace AI, with a lack of training revealed as the principle barrier. Over 50% of SMEs cite a lack of internal AI skills and knowledge.

This is a critical gap in skills and strategy, not least because AI is something of a double-edged sword for small businesses. For example, in terms of cybersecurity, while AI has the capacity to strengthen protection for small firms, it is also making attacks more sophisticated and damaging.

In short, AI in the workplace has its pros and cons, and given how fast the technology and its use is evolving, and how regulation seems to be failing to keep pace with developments, it seems essential that businesses have a firm understanding of its implications, both positive and negative.

How alternative finance can help with investing in AI training

What is behind the slower pace of AI adoption by small businesses? One of the major reasons is cost. Market conditions remain challenging, in particular for small businesses, with investing in growth and safeguarding cash flow an increasingly difficult balancing act to pull off, regardless of the benefits on offer.

This is where alternative finance can help.

Small business lending from traditional sources remains subdued as Q3 gets under way, with SMEs still experiencing difficulty in accessing finance from high-street banks. As a result, alternative lenders are becoming 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.

SME finance options for investing in greater AI adoption

Whatever the industry, AI can have a beneficial impact on operations, with the advantages notably significant in some cases. It is also essential to be aware of risks relating to AI. This underlines the importance of AI training.

As such, while it is understandable that some SMEs are proving reluctant to commit cash to investment in AI training, with access to finance remaining challenging, it is essential that they find a way. This is why it is crucial that key-decision makers are aware of all the finance 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.