Five directors banned over £198k bounce back loan fraud
In the drive to catch bounce back loan fraudsters, bankruptcy restrictions totalling 48 years have been given to five individuals who took £198,894 in Covid-19 financial support
In each of the five cases, the bounce back loans were either wrongfully obtained through overstating their businesses turnover, or on behalf of a company that had already ceased trading prior to the pandemic, or were simply misused for personal use rather than legitimate business spending, the Insolvency Service said.
Charlene Wilson was a self-employed beauty therapist based in Jarrow. She received a £50,000 bounce back loan by overstating her turnover and spent around £15,000 on personal expenses. She has accepted bankruptcy restrictions for eight years.
Georgiana Cercel ran a beauty business from her home in Lincoln while studying full-time. She received a £50,000 bounce back loan by overstating her business turnover, and gave £10,000 to her sister. She is subject to bankruptcy restrictions for 10 years.
Florin Bodale worked as a building contractor through his company Varga Construction. He obtained a £50,000 bounce back loan by overstating his turnover, although he told investigators he believed he had been asked for total turnover for the previous three years. However, this amount would still have been less than half the turnover he stated. He has accepted a 10-year bankruptcy restrictions undertaking.
Sarah Sweeting ran a farm shop home delivery service from October 2020. She obtained a £22,000 bounce back loan despite not being eligible as businesses had to have been trading prior to March 2020. Of the £22,000, she transferred around £14,000 to her husband. She has accepted a 10-year bankruptcy restrictions undertaking.
Abbas Moradmand ran a tyre business from 2018 to 2019 then worked as a taxi driver. After a short closure the business re-opened and continued to trade under new ownership. However, Moradmand secured a bounce back loan of £26,894 to which he was not entitled as it was based on an application on behalf of his former tyre business. He has accepted a 10-year bankruptcy restrictions undertaking.
Their bankruptcy restrictions mean none of the individuals are able to borrow more than £500 without disclosing their bankrupt status. They also cannot act as a company director without permission from the court.
In each of the above cases the local official receiver is working on potential recovery action.
Kevin Read, official receiver at the Insolvency Service, said: ‘In all of these cases it was obvious, or it should have been obvious, that they either misused the bounce back loan for personal benefit, took a larger loan than they were eligible for, or weren’t eligible for a bounce back loan at all.
‘This is taxpayers’ money they have abused and we will not hesitate to impose bankruptcy restrictions in these circumstances.’
- Published in Bounce back loan
Bounce Back Loan repayment terms extended to 10 years
Bounce Back Loan borrowers will now have the option to tailor payments according to their individual circumstances with the option to delay all repayments for a further six months.
Pay as You Grow will be available to over 1.4 million businesses, which collectively took out nearly £45bn through the Bounce Back Loan Scheme.
The Treasury’s Pay as You Grow repayment flexibilities enable borrowers to tailor their repayment schedule, with the option to extend the length of their loans from six to 10 years (reducing monthly repayments by almost half), make interest-only payments for six months or pause repayments for up to six months.
The Chancellor has now extended the flexibility of the third option, which will now be available to all from their first repayment, rather than after six repayments have been made. This will mean that businesses can choose to make no payments on their loans until 18 months after they originally took them out.
These Pay as You Grow (PAYG) options will be available to more than 1.4 million businesses which took out a total of nearly £45bn through the Bounce Back Loan Scheme. Businesses first began to receive the loans in May 2020 and the first repayments will become due from May 2021 onwards.
This is in addition to the government covering the costs of interest for the first year of the loan.
Pay as You Grow’s additional support, first announced by the Chancellor in September, will give borrowers the option to tailor repayments to their individual circumstances.
This will provide more time and greater flexibility to repay the loans.
The government has confirmed that lenders will reach out to borrowers to provide information on repayment schedules and how to access flexible repayment options.
Chancellor Rishi Sunak said: ‘Businesses are continuing to feel the impact of extended disruption from Covid-19, and we’re determined to give them the backing and confidence they need to get through the pandemic.
‘That’s why we’re giving Bounce Back Loan borrowers breathing space to get back on their feet, through greater flexibility and time to repay their loans on their terms.’
Lenders will proactively and directly inform their customers of Pay as You Grow, and borrowers should only expect correspondence three months before their first repayments are due.
It will provide businesses with the following options:
- extend the length of the loan from six years to 10 at the same fixed interest rate of 2.5%;
- make interest-only payments for six months, with the option to use this up to three times throughout the loan; and
- pause repayments entirely for up to six months. This option is available once during the term of the Bounce Back Loan.
Business secretary, Kwasi Kwarteng, added: ‘The comprehensive and generous financial support package we have delivered across the UK has protected jobs, saved businesses and kept local economies on the move.
‘While our vaccine rollout is moving at an incredible pace and the end is in sight, we know times are still tough for many companies and extra support is needed.
‘These flexible repayment options will give businesses the time they need to recover from the pandemic before paying back loans, giving them the breathing space and confidence to build back better.’
The British Business Bank runs the Bounce Back Loan Scheme. The government has made clear that lenders are expected to offer pay as you go options to all borrowers under the Bounce Back Loan Scheme.
Richard Bearman, managing director, small business lending, British Business Bank, said: ‘Pay As You Grow will provide tangible benefits to Bounce Back Loan recipients, many of whom may have accessed the Bounce Back Loan Scheme to borrow money for their business for the first time.
‘The scheme offers greater flexibility to businesses who may need flexibility in paying off their Bounce Back Loan and enables them to manage their repayments more effectively.’
Under the Bounce Back Loan Scheme, no repayments or interest are due from the borrower during the first 12 months of the loan term.
It is a powerful and safe way to get your testosterone levels in place. buy cialis True, buy viagra in south australia but a lot of guys want to go out with a smile on their face.
- Published in Bounce back loan