53 banks close every month: what does this mean for small businesses?

With news that Santander is considering exiting the UK, we look at what to do if your bank closes. 

According to a recent report from the Financial Times, Spanish bank Santander is exploring a number of options to tackle difficulties operating in the UK market. 

It’s reportedly struggling with high operating costs and the impact of the UK’s ringfencing regime, which separates retail banking from other activities, like investment. If Santander UK closes its 444 branches, 15 million customers – many of them using business services – will find themselves without a high street bank. 

Tracking UK bank closures 

Banks and building societies have closed 6,228 branches since 2015, according to research from consumer champion Which? – equivalent to 53 each month. This impacts access to cash for small businesses.

According to Which?’s report, UK banks are already planning 116 branch closures for 2025: 

• Lloyds: 45
• Halifax: 43 
• Bank of Scotland:14 
• Lloyds TSB: eight 
• Barclays: six

Inevitably, some areas will be hit harder than others. More rural communities that don’t have easy access to other branches will be more affected.

Which? has a useful tool that you can use to find out whether your local bank branch is closing or has recently closed.

The guide shows the banks that have closed the most branches since 2019, as well as the most impacted areas.

You can also check which parliamentary constituencies have lost the most branches.

There are 30 entire UK constituencies without a brick and mortar bank branch, and 60 are down to their final branch. These areas have no branches left and have lost 100 per cent of their bank network:

• Bradford South
• Erith and Thamesmead
• Glasgow North East
• Liverpool, West Derby
• Nottingham East
• Sheffield, Hallam
• St Helens North
• Warrington North
• Wentworth and Dearne

How will businesses be protected against bank closures?

Organisations like Which?, UK cash machine network LINK, and the FCA are making sure that banking customers know which banks are closing branches (and when). They’re also taking steps to assess the impact of bank closures on the community.

For example, LINK reviews a community’s needs once it’s been told about a branch closure, and establishes whether a new ‘banking hubs’ could be launched there to protect access to cash. However opening these hubs has been slow going, with only 76 out of a recommended 162 having been opened as of September 2024. 

The FCA also has created guidance for banks, setting out expectations when they’re considering either closing a branch or partially shutting down services (for example, removing ATMs). The bank should analyse:

• the needs of customers currently using the sites (including the needs of relevant small and micro businesses and customers in vulnerable circumstances)
• the likely impact of the closure or conversion, and alternatives that could continue to meet customers’ needs

What to do if your bank is closing 

If your bank is closing, there’s a number of measures you can take to make sure you can still access all the banking services needed to successfully run your business. 

Switch banks 

If you prefer to use a bank with a real-world branch, you can use the Current Account Switching Service to safely move your banking to a new bank or building society. 

This will help you move your money, standing orders, Direct Debits, and even future payments to a new account with a bank you can visit in person. Sometimes banks offer incentives for switching, like a cash bonus, and you might be able to access a higher rate of interest on savings or lower overdraft fees. 

If you have a small business loan, many banks will let you use another provider to manage your business banking while continuing to manage your loan. You might have to open something called a fee-free Loan Servicing Account with your old bank while you pay off the loan. 

Find out more about switching bank accounts with our full guide. 

Go digital 

There’s a number of brilliant banking apps that let you access most services from your phone. You can even pay into your account by cheque by taking a picture with your phone. 

Some are online only, but almost all high street banks offer banking apps too. You might find that sticking with your current bank and using their banking app will allow you to do everything you need to run your business. 

Check out the best small business bank accounts with banking apps. 

Use the post office 

Finally, you can actually pay in and take out money from most banks at the Post Office. Head to the counter and you can use your card and PIN to access services, and even pay in cheques.

More business banking guides: 

• Cash deposit limits on business bank accounts
• How to get a mortgage when self-employed
• The best joint business account for small businesses
• How the Bank of England base rate affects your business

Andriy Blokhin/stock.adobe.com