Many people in the financial industry raised concern over Bounce Back Loans back when they were first introduced, and their fears were justified. HM Treasury reports that BBLS paid out approximately £46bn, but the National Audit Office predicts that the UK taxpayer could lose up to £26bn from investor fraud.
Now the 12-month interest-free period of the Bounce Back Loan Scheme has ended, we are seeing an increase in the number of companies struggling to make repayments and looking for a way out. The situation can be likened to flaws in the UK bankruptcy system, which can leave creditors empty-handed while the directors hold onto huge sums of money and valuable assets through complex concealment of their wealth.
Government loans are susceptible to investor fraud
The Insolvency Service recently noted that since February of this year, it had successfully petitioned the courts to wind up five companies involved in abusing Covid-19 government loans. In one case, a company director was disqualified for 12 years after fraudulently claiming a £50,000 Bounce Back loan and transferring the full amount from the company to himself days before the company went into administration.
When you took out a Bounce Back Loan, but need to close your company for genuine reasons
As a business, it’s not always easy to know how to manage financial affairs appropriately, which is where insolvency practitioners come in. For example, you may have genuinely taken out a Bounce Back Loan to help boost your business, but now find yourself in the unfortunate situation of needing to close your company. The easiest thing to do is to call on the expertise of insolvency practitioners, who can guide you through the best course of action, without it leading to penalties or disqualifications.
Investor fraud is increasing
An increase in investment scams since the beginning of the Covid-19 pandemic has left savers at least £4m out of pocket, according to the Investment Association.
There have been reports of over 300 incidents of scammers posing as investment managers, as investors are tricked into revealing personal valuable data. During the extended period of uncertainty as a result of the pandemic, criminals have been increasingly ruthless in stealing from investors and creditors.
Need help? Contact expert insolvency practitioners today.
At Beacon LIP, we understand the stress caused by financial pressures and endeavour to provide professional advice in a sympathetic and understanding way. We deliver tailored solutions to company directors, business owners and individuals experiencing financial hardship and problems. Contact us today on 02380 651 441 to speak to our insolvency practitioners to see how they can help.