The announcement that some small businesses can get a discount on a government-backed cyber-security scheme is good news, but it also underlines how much spending is required. How can they balance investment in cyber-protection with safeguarding working capital?

The government are offering smaller businesses 75% off its Cyber Essentials certification programme. The £2.4 million-move is undeniably positive, but at the same time it highlights a long-term weakness in terms cyber-security in the sector: a reluctance to spend on strengthening protection.

This disinclination to invest has meant that the threat posed to small businesses by cyber-criminals as only continued to grow in recent years as these malicious actors have sought to exploit under-protected systems. According to the latest government research, the cost of a notable cyber-attack could reach as much as £195,000.

This vulnerability is highlighted in a recent study from cyber-insurance provider CFC, in which it is revealed that while there is a greater awareness of cyber-risks among SMEs, they still underestimate the threats posed by cyber-attacks, with insufficient clarity with regard to cyber insurance.

Notably, according to the latest Hiscox Cyber Readiness Report, small businesses in the UK are more likely to targeted by a cyber-attack than those in other countries, with as many of 40% of firms falling victim to cyber-criminals.

How alternative lenders can help with cyber-security investment finance

As the offering of the significant discount on the cyber-protection programme suggests, cost is a main barrier to small business investment in cyber-security, whether in systems and hardware or in providing training to staff members in order to improve understanding of the threat.

While this is hardly surprising news given the headwinds that these firms have been battling for a prolonged period, and the challenge this represents to mobilising money for investment, even in essential development, small businesses still need to find to way to up spending.

Against a backdrop of continued caution with regard to small business lending from traditional banks, this is where alternative lenders can help.

Alternative lending solutions, such as invoice finance, asset finance and peer-to-peer lending, have become funding lifelines. For example, asset finance is being commonly used means for buying vehicles, machinery or equipment, while invoice finance is being employed to manage staff costs and, more broadly, to cover costs while income catches up.

Overall, 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 business finance options for increasing cyber-protection spend

While the discount on the Cyber Essentials programme may prove a lifeline for some small businesses, it is clear that investment on much larger scale is needed to ensure that the sector is adequately protected against cyber-attacks, not least as such incidents risk slowing development and ultimately closing doors.

This is why, with legacy lenders remaining cautious with regard to small businesses, 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 Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.