The Bounce Back Loan Scheme (BBLS) was introduced by the Government in early 2020 to support small and medium-sized businesses. Under the scheme, businesses can borrow between £2,000 and up to 25 percent of their turnover from the state, with a maximum loan of £50,000 being available.
“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.”
In recent weeks, it has emerged banks are beginning to take remedial action on this fraudulent activity but this could have negative repercussions on the self-employed and small business owners involved.
Fraser continued: “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.
“Legitimate funds may 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.”
Currently, there are 29 lenders participating in the scheme, including many retail banks.
These lenders will require claimants to fill in an online application and details on this can be found on the Government’s website.
While these loans are primarily designed for businesses, Martin Lewis detailed in early 2020 that he had written confirmation from the treasury that the loans can be used to “support usual income”.
The Money Saving Expert highlighted this could be beneficial for people who had “fallen through the cracks” of SEISS.
Businesses from any sector can apply except for the following:
- Banks, insurers and reinsurers (but not insurance brokers)
- Public-sector bodies
- State-funded primary and secondary schools
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