An employee skills gap is holding back small businesses in a critical area, at a time when firms can ill ford to be missing out on opportunities. Cost is the main barrier. How can businesses afford to invest in essential training while safeguarding cash flow?

What skills gap is endangering small businesses?

In what area is employee training lacking? This time it’s a big one – AI, but it’s an issue that is evident across the sector, from sustainability to cyber-security. And a common theme across these areas is that the skills gap is widening, endangering the ability of firms to take advantage of new technology and related benefits.

According to new research from QA, while AI is now widely used by businesses, almost a third of staff have no formal training in the technology, while only 15% get ongoing or advanced support. This impact of this shortfall is clear: less than 10% of employees considering themselves advanced or expert AI users and most using it solely for straightforward, low-impact jobs.

This disconnect is even more jarring because firms are spending significantly on AI and other technology – but they’re not investing to the same extent in the training that can optimise this outlay, with a lack of AI literacy and the underutilisation of the technology blocking access to key productivity and efficiency gains.

Of course, investing in training for employees is the solution. Spend on closing the skills gap, bring staff up to speed, reap the rewards – sounds simple. Except it isn’t, because training comes with a price tag – courses to be paid for, time away from clients to be covered, salary expectations to be managed, etc.

How alternative lenders can help with finance for staff AI training

It is hardly surprising that cost is a primary cause of the widening AI skills gap. The pressure on small business capital resources and cash flow is relentless, and the economic fallout from the Iran war is only set to crank it up further.

According to a new study from Begbies Traynor Group, the number of UK businesses in critical financial distress rose by over a third in Q1 2026. Rising fuel prices and energy costs are only to push this figure higher, with many sector sources forecasting that small firm bills could increase by over 50% by the end of Q2.

However, with development such as AI training for employees, firms have to find a way to invest. If they don’t, they risk getting left behind and facing up to a weakened market position. Access to finance is critical, and with traditional banks remaining cautious over small business lending, this is where alternative finance can help.

Small business lending from legacy sources remains difficult in Q2, with almost 40% of firms are finding accessing affordable finance one of their biggest challenges. Notably, there has been a call for the introduction of legislation that would require banks to increase access to low-cost lending for small businesses.

In response, alternative lending solutions, such as invoice finance, asset finance and peer-to-peer lending, have become funding lifelines. By offering a more accessible, cost-effective and personalised approach to lending, these alternative finance facilities are helping small businesses navigate the current climate and target greater stability and growth.

Small firm finance options for funding workplace AI training

Closing the AI skills gap in the current climate is both essential and challenging. The market is facing yet another period of acute uncertainty as the Iran war shows few signs of coming to an end, yet at the same time maximising the benefits of new technology such as AI is critical if firms are going to survive and grow.

As such, it is crucial that small businesses can access the finance they need to afford key investment and safeguard cash flow. With traditional banks steadfast in their caution in lending to small firms, it is important 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 Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.