BCR expects more awardees to revise business cases as £100m Pool E launches

Coronavirus will mean that earlier awardees “are going to take longer to achieve” their grant commitments.

Banking Competition Remedies Ltd (BCR) today launched its £100m Pool E grant fund, with details on how applicants will soon be able to apply for the cash that was returned by Metro Bank and Nationwide earlier this year.

The BCR also addressed the recent challenges of the grant process, and in particular the impact coronavirus is having on awardees.

“Inevitably some commitments are going to take longer to achieve than originally envisaged and BCR processes allow for revised business cases,” the group wrote.

Additionally the BCR points to the challenges of players operating outside the government coronavirus support schemes where “there is a low appetite for lending given the substantially increased risk of business failure and bad debt.”

Fluidly CEO Caroline Plumb, a Pool D awardee, welcomed the BCR's new Pool E grants but agreed that the government's "CBIL and BBL schemes have launched to support struggling small businesses through the Covid-19 crisis and, while intentions are good, showed a concerning reliance on legacy incumbents. Such an approach risks compromising the chances of fostering competition and could undermine the stated remit of BCR, which would be a crying shame."

In particular the BCR noted that its £225m Incentivised Switching Scheme, which offers payouts for business customers of RBS subsidiary Williams & Glyn to switch to one of a dozen other business banks, will be badly affected by the current environment.

“We now expect to see an inevitable decline in SMEs switching banks given the current circumstances,” the BCR said.

As AltFi has pointed out, switching business bank at the moment could be detrimental to SME’s survival given the way banks are prioritising existing customers with Bounce Back Loan approval.

On Pool E, the BCR revealed the process will kick off in June with two rounds.

Round 1 aimed at Pool D eligible applicants with two £5m and four £2.5m grants, and Round 2 aimed at Pools A, B and C eligible applicants with one £35m grant, one £25m grant and two £10m grants.