SMEs Deserve Better: How banxlocal Will Transform Business Banking

Small and medium-sized enterprises are the backbone of the British economy, employing over half of all private sector workers and generating the majority of business turnover. Yet when it comes to banking services, they're increasingly being left behind by the very institutions that should be supporting them.

The SME Finance Gap Widens 

Recent data from the British Business Bank paints a concerning picture. While gross bank lending to SMEs reached £62 billion in 2024—a 4.5% increase—the proportion of small businesses actually using external finance has fallen from 50% in Q3 2023 to 43% by mid-2024. Even more troubling, 69% of SMEs report a lack of awareness about available finance options, up from 60% just a year earlier. 

But it's not just about access to credit. As bank branches disappear from high streets, small businesses are losing something equally valuable: the ability to conduct daily banking operations efficiently and access face-to-face financial guidance when they need it most. 

The Hidden Costs of Branch Closures

When a bank branch closes, local businesses don't just lose convenience—they lose productivity. Business owners now spend valuable hours traveling to distant branches to deposit cash, arrange business loans, or resolve banking issues. For a small retailer or café handling daily cash transactions, this can mean closing the shop for half a day just to get to a bank. 

The impact ripples through communities. Research from PwC found that nearly 1,000 bank branches closed in just two years, contributing to 10 retail or hospitality outlets closing every day in 2024. The connection is clear: when banking infrastructure disappears, it accelerates overall high street decline, creating a downward spiral that affects everyone.

The Digital Paradox 

Banks argue that most customers now prefer digital channels, and the statistics seem to support this—74% of Barclays customers interact via telephone, online, or mobile banking. But this narrative misses a crucial point: businesses value different things than individual consumers. 

While challenger banks like Monzo, Mettle, and Starling rank highest for overall service quality in the latest Business Banking Service Quality survey, there's a telling detail: Handelsbanken, which emphasizes relationship banking and personal support, ranked fourth despite not featuring highly in online and mobile services. The message is clear—businesses value digital convenience, but they haven't given up on the importance of personal relationships and face-to-face support.

A New Model for a New Era

This is where banxlocal's multi-bank, multi-service model becomes transformative for SMEs. Imagine a local business owner walking into our branch and having access to:

• Multiple business current accounts from different providers, allowing them to choose the best fit rather than defaulting to their personal bank 

• Real-time comparison of business loan rates and terms from various lenders 

• Access to challenger banks and digital-first providers that offer better rates but lack physical presence.

• Efficient cash deposit and withdrawal services without traveling across town.

• Face-to-face support for complex issues like fraud, bereavement services, or business expansion planning.

As we prepare to open our first branch in 2026, we're actively engaging with local business communities to understand their specific needs. Our branch design includes dedicated spaces for business banking, with extended hours to accommodate the realities of running a small business. 

Supporting Economic Growth 

The British Business Bank's research shows that business investment is crucial for productivity and economic growth—yet UK investment has historically lagged behind G7 counterparts, particularly among smaller firms. Part of the solution is improving access to finance and financial education. 

banxlocal branches will serve as financial education hubs, helping SMEs navigate the increasingly complex landscape of funding options. From the government's Growth Guarantee Scheme to alternative lenders and equity financing, our staff will provide unbiased guidance to help businesses find the right financial tools for their growth stage. 

Britain's small businesses deserve a banking infrastructure that matches their ambition and supports their success. As we count down to our 2026 opening, we're committed to building exactly that—one branch, multiple banks, endless possibilities.