The threat posed by cyber-attacks to small businesses is bigger than ever, not least as the use of AI in the workplace accelerates at pace. But these firms are struggling to fight back. How can they afford to invest while safeguarding cash flow in the current climate?

New research shows cyber-attacks as the number one risk for business in 2026, above economic pressures, negligence claims and regulatory claims. Almost two thirds of firms put cyber-threats at the top of the pile. And the risk is greatest for small businesses.

While attacks on large firms – such as Marks & Spencer, Co-op and Jaguar – grab the headlines, it is small businesses that are increasingly being target by cyber-criminals. According to government data, 42% of micro firms and 46% of small firms have reported an attack or a breach in the last year.

While the cash costs in cases involving large businesses are always more notable, the consequences for smaller ones are more serious – they don’t have the same resources to deal with the fallout from an attack. Research from Samsung shows that one in five SMEs would have to shut up shop if they were hit with a breach or an attack, with such an event costing them around £100,000 in lost revenues and fines.

With such sums and scenarios in play, it is easy to see why cyber-attacks have become such a danger to small businesses. Yet, despite the continued focus on cyber-security, these firms continue to drag their feet when it comes to beefing up systems and putting more stringent safeguards in place.

How alternative finance can help with cyber-security investment

The main reason for hesitancy among small businesses towards investing in cyber-security is cost. And that’s hardly surprising. Strengthening systems means spending money in such areas as new software, incident response planning and strategic preparedness and training, including in relation to the use of AI, and this all comes with a hefty price tag.

At the same time, accessing finance is proving as challenging as ever, with traditional banks continuing to exercise caution with regard to small business lending. This is where alternative finance can help.

In response to this squeeze, alternative finance has become into a vital lifeline. Solutions such as invoice finance, asset finance and peer-to-peer lending are filling the funding gap, offering speed, affordability and tailored support. These agile funding facilitates are helping small businesses survive and target stability and growth.

Small firm finance options for investing in greater cyber-resilience

The penny really should have dropped about cyber-security now for small businesses, but the level of protection still isn’t matching the level of threat. Yes, the market remains difficult and weighed down by major macro-economic and geo-political factors, and accessing finance from legacy lenders remains tough, but investment is critical.

This is why it is vital that key-decision makers at small firms are awareness 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.