After a fund supported by the European Union granted it £100 million, Starling Bank is seeking grants worth as much as £35 million. The upstart financial institution is seeking two grants — £25 million and £35 million — from Banking Competition Remedies (BCR) funding to make new small and medium-sized business (SMB) offerings, Yahoo Finance UK reported.
BCR has a pool of funds created by the Royal Bank of Scotland (RBS) to foster competition in the British banking space. After the RBS bailout in 2008 by the British government, the vehicle was made to meet the state aid regulations of the European Union.
The new funding had become available after two banks that had been granted funds at first — Nationwide and Metro Bank — returned £100 million overall. In 2019, Starling, for its part, was granted £100 million from the fund to make new small and medium-sized enterprise (SME) space offerings.
Starling Bank Chief Executive Anne Boden started Starling Bank in 2014 as a completely digital bank and today it counts more than 1.4 million clients — 180,000 of them small companies. The upstart has notched over £360 million in equity funding as of now.
In April, the Nationwide Building Society had curbed its intentions to start a business banking operation, noting that the pandemic has made the space not feasible for now. The British lender said in a statement that the virus “changed the medium-term interest rate landscape” and made it not tenable for those new to the space as of the time being.
As reported at the time, the idea for the company to come into the business banking arenas was inspired a year prior. At that time, the lender won a BCR program grant.
Nationwide was to be out the approximately £70 million it had put into the effort, and staffers who had been at work on the concept were to be moved to other initiatives. The lender was also to be returning the £50 million grant from the BCR program.