EU SME funding programs have "non bankability" as a criterion (or variations on that, it changes every few years).
What that means is that if you have alternative sources of funding, even just potentially, you are disqualified.
What they're trying to do is 1) avoid competing with private funding and 2) fill in the gap where private funding is too risk averse but the project has huge potential.
In practice the result is as you say, this is basically a criterion to bias the selection to bad projects.
EU SME funding programs have "non bankability" as a criterion (or variations on that, it changes every few years).
What that means is that if you have alternative sources of funding, even just potentially, you are disqualified.
What they're trying to do is 1) avoid competing with private funding and 2) fill in the gap where private funding is too risk averse but the project has huge potential.
In practice the result is as you say, this is basically a criterion to bias the selection to bad projects.