Is the penny finally dropping about small business vulnerability to cyber-attacks? A raft of recent announcements suggests an increasingly acute awareness of the threat, but a lack of investment remains a key issue. How can firms invest while safeguarding cash flow?

How much are attacks costing businesses and why are small firms targeted?

There seems to be little doubt now about the danger that cyber-attackers pose to small businesses. The National Cyber Security Centre is the latest institution to warn against the growing threat, notably calling out what it claims is a widely held belief among small business owners that they won’t be targeted because of their size.

At the same time, the government has launched a campaign urging businesses, in particular small firms, to do more to protect themselves against cyber-attacks. The initiative follows the publication of government research showing that cyber-threats cost UK businesses £14.7 billion annually.

The study highlights that the average cost of an attack is £195,000, while half of small firms have experienced such an attack in the last year. Tellingly, it also reveals that less than a third of businesses carried out formal assessments of suppliers and that most lacked awareness about cyber-security attacks in their supply chains.

A new report from Chainanalysis paints a similar picture. According to this research, cyber-criminals are increasingly targeting SMEs, largely because these firms have less robust cyber-security systems.

Businesses aren’t ignoring the problem – far from it – with almost 60% of firms planning to increase spending on cyber-security by over 10% over the next year, according to the KPMG Global Tech Report 2026. However, critically, small businesses are continuing to drag their heels when it comes to investment.

How alternative lenders can help with investing in cyber-security

The muted engagement and underinvestment from small businesses in strengthening cyber-security is attributable to a number of causes, but the heart of them all is affordability. The prospect of investing significantly in upgrading systems and training is difficult to face for small firms in the current climate.

And this is perfectly understandable, but these businesses have to find a way to balance investment with protecting cash flow, and they don’t have the deep pockets that larger firms have. This is where alternative finance can help.

Traditional lending for small businesses has hit a bottleneck in 2026, with nearly 40% of firms struggling to secure the affordable capital they need to survive. This funding gap has triggered urgent demands for legislative reform to force banks into providing fairer, low-cost lending. In response to this squeeze, alternative finance has evolved from a secondary option into a vital lifeline. Solutions such as invoice finance, asset finance and peer-to-peer lending are filling the gap, offering speed, affordability and tailored support. These agile funding facilitates are helping small businesses survive and target stability and growth.

SME options for accessing finance for cyber-protection investment in 2026

The increasing awareness of the threat posed by cyber-attacks to small businesses if welcome, even if the government’s campaign does seem a little late in the day. However, solving the problem of affordability is far from easy.

The solution for small firms, as ever, lies in accessing finance, but with traditional banks remaining cautious with regard to lending, this continues to be challenging. This is why it is important that key-decision makers are aware of all the available finance options, 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.