Bounce Back Loan misuses?
The Bounce Back Loan Scheme (BBLS) was designed to help out businesses that were struggling financially at the start of the pandemic. However, as we have told you on many occasions, there were complications down the road for a number of business owners who took on one of these loans. This article lists 10 Bounce Back Loan misuses.
1. Mismanaging turnover
If you submitted an overestimation on your application then you could have broken the BBLS rules. Businesses were allowed to borrow 25% of their annual turnover – for up to £50,000 – in BBL money.
2. Applying with an inactive company
Existing companies needed to be looking to trade if they required the services of a BBL.
3. Personally using the funds
BBLs were specifically designed to help out struggling businesses. However, they were not meant to personally aid business owners. Using the funds for the business is more likely to create a viable avenue for repayment, if used correctly, whilst lavish personal spending is not.
4. Third-party deception
If you have set up a third-party group that is acting as a business, but isn’t a business, you could be accused of deliberately misleading the terms of the scheme.
5. The company isn’t in the UK
The BBLS was only for businesses that existed inside the UK. It was not for businesses based outside of the UK.
6. Making several applications
A sole trader might have made a number of applications to the BBLS and racked up a large amount of money, through reporting ungenuine business activities.
7. Group companies applying as singular entities
Group companies should have applied for one collective BBL, not several individual BBLs.
8. Voluntary Dissolution
If the limited company wanted to retain the BBL funds from the start, it might have intended to seek a voluntary dissolution after acquiring the BBL.
9. Failure to file accounts
If the limited company has no intention of repaying the BBL, they might fail to file their accounts before looking for a compulsory strike-off application.
10. Applying for several ineligible Covid support schemes
Businesses may have applied for several Covid support schemes that they weren’t eligible for.
Get in touch
If you have been having Bounce Back Loan troubles then please do get in touch! Not everyone is guilty of Bounce Back Loan misuses. Call one of our compassionate experts at 0800 088 2142.