Smaller businesses could be vulnerable in a bank crash

Finance leaders at smaller businesses may not be adequately prepared in the event of a bank failure. That’s according to new survey data from deposit protection firm Ampersand, which found that businesses could only survive an average of 2.9 months if their primary bank failed. And 29% of respondents said their organizations would only stay solvent for “up to two weeks” if their key bank collapsed.

The survey polled financial leaders in the US with decision-making authority over their organizations’ bank deposits, including CFOs, in December 2025.

Respondents represented companies in a variety of industries, including professional business services like construction, manufacturing, and retail. The organizations they worked for tended to be smaller: 80% had fewer than 500 employees and 44% had under 100 employees, and 21% of respondents described themselves as self-employed. Four in 10 (41%) of the organizations had cash deposits of less than $10 million.

Almost nine in 10 (86%) respondents said their organizations had balances of more than $250,000—over the FDIC insurance limit—at a single institution. That could leave them vulnerable should those institutions falter.

Risk of a bank collapse appears fairly low right now. Only two US banks failed in 2025, and both of them were single-branch institutions.

Large banks passed the Fed’s annual stress test in June 2025, and the central bank reported that US banks were able to “weather a severe recession, while staying above minimum capital requirements and continuing to lend.” And the Office of the Comptroller of the Currency stated in its Fall 2025 Semiannual Risk Perspective that “the strength of the federal banking system remains sound,” with banks, by and large, maintaining healthy capital and liquidity ratios that could protect them from potential stress.

Nevertheless, the Fed is keeping an eye on smaller banks with exposure to commercial real estate loans, Bloomberg reported.

The silver lining to the Ampersand report is that most financial leaders (75%) are aware of recent bank crashes, and 61% have made changes to their banking practices in response.

They’ve used strategies like moving cash to larger/safer banks, placing deposits at multiple banks, and converting funds from cash into other investments, the survey found.