Belfast – A new report from the Federation of Small Businesses Northern Ireland (FSB NI) has exposed rising concerns among entrepreneurs over declining access to reliable banking services, threatening the operational stability and growth prospects of the region’s small businesses.
Small business owner Peter Burrows, who operates The Conservatory Cafe in Killinchy, County Down, exemplifies the challenges many are facing. He has had his business bank account suspended twice over the past six years, with both incidents stemming from bureaucratic miscommunication—first due to an annual statement request just 10 months after opening, and again last year, due to a state pension issue.
“These banking systems are set up for compliance, not for people,” Burrows told BBC News NI, voicing frustration over the lack of flexibility and support. His experience of being locked out of critical business functions like bill payments and direct debits underscores the operational risks involved.
The FSB NI survey of more than 300 small business members found that newer businesses were especially vulnerable, frequently being denied access to credit, a situation that the report links to slowed economic development across Northern Ireland. For small businesses, banking is not merely transactional—it is existential.
FSB NI Chair Alan Lowry called the results “worrying,” citing cash flow as the “lifeblood” of any small business. “Money in, money out, and the ability to manage that cycle efficiently is vital,” Lowry said. “But with so many encountering delays or rejections, businesses are turning to informal sources for funding—often at great risk.”
He added that this systemic gap opens the door to high-interest loans and unsustainable repayment terms, increasing financial distress. “We’ve seen in the past how lack of access to regulated banking channels can lead to disastrous outcomes for small operators.”
Across Northern Ireland, traditional banking infrastructure has shrunk significantly. Current estimates place the number of active bank branches at around 115, while Post Offices (480) and a small number of banking hubs (6) attempt to fill the void. Yet for many, these alternatives fail to replicate the trust and functionality once offered by local branches.
According to David Raw, Managing Director of Commercial Finance at UK Finance, the shift to digital banking is largely driven by demand. “Many businesses now prefer the convenience and speed of online channels,” he said, adding that the banking sector remains committed to supporting SMEs in the region.
However, Raw acknowledged the importance of continued collaboration with FSB and other stakeholders to address the evolving needs of small businesses. “We are working to ensure that even as the landscape changes, businesses still get the support they need.”
The findings in Northern Ireland reflect broader global trends, where digitisation, consolidation, and compliance demands are reshaping how financial services engage with smaller enterprises. The challenge ahead lies in balancing innovation with accessibility, responsiveness, and trust—qualities that many small business owners feel are currently missing.
