It is time for the RBS Capabilities and Innovation Fund to become Capable and Innovative in the face of COVID-19.
Last Friday the 3rd April, The Nationwide Building Society abandoned its plans to enter the business banking market and said it was returning the £50m it was awarded last year from the Banking Competition Remedies (BCR) Capability & Innovation Fund.
This follows in the footsteps of Metro Bank who also returned £50m that it was awarded from the same Fund on the 26th February 2020.
It is obvious to all observers that the well-meaning Banking Competition Remedies package of measures so painfully drawn up after the failure of the RBS / Williams & Glynn demerger is no longer fit for purpose as SME’s and charities throughout the UK face unprecedented pressures on cash flow due to the COVID-19 crisis.
Rangewell, the business finance specialist, is calling for all the monies being handed back to the Banking Competition Remedies Fund to be returned to The Treasury within days and channelled to support specific sectors which are vital to the health and well-being of the UK.
Healthcare businesses such as Dentists, Opticians, Pharmacies and Vets who have either been forced to close or are operating reduced hours under immense capacity constraints.
Such businesses will again perform vital roles in the health and wellbeing of the Nation once the lockdown is lifted and cannot afford to waste time and resources worrying about their cash flow needs over the coming months
Registered Charities operating in the UK for the benefit of UK Citizens whose focus is on education, poverty alleviation, training, accommodation, community development, support of the armed forces or emergency services.
Rangewell suggests a simple mechanism that would allow all eligible charities and healthcare businesses to apply for:
Loans up to 10% of 2019 turnover.
For a period of 5 years.
No Personal Guarantees.
Interest-Free for the full duration of the loan.
Eligible charities would be registered and in good standing with the Charities Commission and healthcare businesses would be registered and in good standing with their appropriate regulator (CQC etc).
Nic Conner, Rangewell’s Head of Research said:
“It’s not even been a year since Nationwide was awarded the £50 million from the Banking Competition Remedies fund to support SMEs and they have already abandoned their plans to finance small business at a time when they are most needed”.
“Charities and Healthcare Businesses are the hidden backbone in ensuring the health and wellbeing of the nation – they don’t have time to be worrying about cash flow right now”.
“Rangewell’s suggestion to re-allocate the £100m being handed back to the Treasury from the failed Banking Competition Remedies Scheme and quickly getting it into the hands of Charities and Healthcare Businesses in the form of an interest-free five year loan would be innovative, exactly what the original scheme was designed to be”.
“The Treasury urgently needs to urgently get all unspent Banking Competition Remedies funds and ensure it is used to support charities and businesses that need it most. When I say urgently I mean within days not months as British businesses need the cash now.”