Bounce Back Loans – “The day of reckoning”

It has been widely reported that the extent of fraud associated with bounce back loans is frankly mind boggling.

The almost complete lack of checks on the validity of claims in order to get the money to genuine, desperate businesses opened the door for fraudsters and opportunists to seek to benefit from the scheme.

Loans were made to businesses that had ceased trading, were already insolvent or who did not need the loans and there are reports of organised criminal gangs making multiple applications. In many cases, the funds were used for non- business purposes such as buying cars or other assets, paying personal debts or using the cash for house deposits.

It seemed that the government were facing the prospect of an enormous amount of debt that would have to be written off.

However, action is now being taken on to recoup the fraudulent loans.

It has been reported today that the banks are now freezing bank accounts linked to suspected fraud. It is entirely possible that legitimate funds will be frozen when the bank’s decision is misplaced. To have an account frozen is exceptionally disruptive for any business – how are the wages and suppliers to be paid?

Whilst recovering fraudulent loans is to be applauded, any business who received a genuine loan must seek immediate professional advice if their accounts are frozen or they receive any approach from any government agencies.