Bounceback scam

[Trinketstogo]

I'm disgusted from hearing that a number of acquaintances my dh deals with took out the maximum bounce back loans last year with no intention of ever repaying. The idea of these low interest loans was as a lifeline to selfemployed, soletraders, small/medium businesses to enable them to remain in business through difficult times. I can see how for many in the hospitality
and entertainment industry they could be invaluable. Repayment doesn't start until after the first year as far as I know. DH has said many of the people he knows in construction managed to get 50k and spent it on goods not connected to their business. They are going to declare bankruptcy/dissolve the business and assume loans will be written off. Surely when they start earning again even under a new name they should be liable for this debt?

This was always going to happen and the government will have been aware of it, it’s one of the reasons that there has to be a fine balance between supporting business to protect livelihoods and protecting the economy.

I work in finance and see this every day it’s nothing new. Sometimes a company can be prevented from bankruptcy if creditors don’t agree.

True. Just sickening people profiteering this way. I wouldn't mind if they got the cheap loan and made an effort to repay it but this immoral and going to add billions to the national debt.

Know some people who bought cars etc and someone who put down large down payment on a flat
All nothing to do with their business
And then there is all the furlough fraud
From huge accounting firms for example
Shocked

I know someone self employed who claimed the self employed grants plus universal credit while also asking his clients to pay in cash so he could continue working while claiming he wasn’t.
It’s so frustrating when we’ll all be paying for this for probably the rest of our lives

In 3-5 years there will be a huge scandal about this but the people that were involved would have already spent all the money so there's not going to be a way to recoup. In every system going people find ways to take advantage and make something work on their favour.

If you declare bankruptcy you can't be a company director for seven years so that would be a bit mad.
I know people who took the loan to pay their corporation tax in order to avoid that very thing.
There seems to be a real push to demonise the self employed when the reality is that many got little help or fell through the cracks entirely.

Ok really thick question here. Does this mean that I could get a loan to get a gardening van? I’m trying to figure out a way to afford it as I’m adapting my gardening business and need to be able to cart more stuff about than my car (now dead) could manage. It was an unexpected vehicle demise and as I’m also moving I will struggle to find the cash but on the other hand need to. Or is this a closed scheme anyway.

If it still exists I bet I wouldn’t qualify but I can dream.

They will have to show some kind of evidence that a business existed. It won’t be as simple as just going bankrupt. If it looks suspicious they will definitely investigate. I also know some one who did this.

I'm not demonising the self employed, my dh is self employed. I just despair at the level of corruption and the apparent ease of it. Some people have ways round bankruptcy by using family members in name only for the new company.

@Floridaflipflops

They will have to show some kind of evidence that a business existed. It won’t be as simple as just going bankrupt. If it looks suspicious they will definitely investigate. I also know some one who did this.

I hope so

When this blows over and when repayments are due, as there is a 12 month lag before you have to pay, when the bankruptcy’s start piling up I’d bet money on it there is a dedicated department that goes through them with a fine tooth comb. No way will the Gov walk away from that amount of money.

@21growbags

Ok really thick question here. Does this mean that I could get a loan to get a gardening van? I’m trying to figure out a way to afford it as I’m adapting my gardening business and need to be able to cart more stuff about than my car (now dead) could manage. It was an unexpected vehicle demise and as I’m also moving I will struggle to find the cash but on the other hand need to. Or is this a closed scheme anyway.

If it still exists I bet I wouldn’t qualify but I can dream.

I'm not sure if there are any funds left but worth checking with your bank. Not all banks took part and many of those that did would only lend to existing business account holders etc.

So of the £89 billion spent on bounce back loans the National Audit Office estimates that £31 billion will never be repaid. Personally I think it will be closer to £50 billion.

www.p2pfinancenews.co.uk/2021/01/29/31bn-of-covid-support-schemes-estimated-to-be-written-off/

@Floridaflipflops

When this blows over and when repayments are due, as there is a 12 month lag before you have to pay, when the bankruptcy’s start piling up I’d bet money on it there is a dedicated department that goes through them with a fine tooth comb. No way will the Gov walk away from that amount of money.

The money was "borrowed" by the Company so the Directors will not be personally liable - that's how a limited liability company works.

I would bet good money that this money will never be recovered. Indeed even if possible it would probably cost more money in investigations and legal action than is ever recovered- the money will have long "disappeared".

The money was "borrowed" by the Company so the Directors will not be personally liable - that's how a limited liability company works.

Presumably that would not apply in the case of fraud though.

I think there could be repercussions for that . How the loans can be used is very clear in the documents you sign .

And a liquidator will be looking at that .

Some people could end up in jail I would say . Fraud is fraud after all .

Also there will be a lot of loans paid back that have not been used and the interest rate is low so may not be too onerous to some companies .

Btw there are random health and safety executive inspections going on at the moment . Unannounced . Which is a good thing

Ok really thick question here. Does this mean that I could get a loan to get a gardening van? I’m trying to figure out a way to afford it as I’m adapting my gardening business and need to be able to cart more stuff about than my car (now dead) could manage. It was an unexpected vehicle demise and as I’m also moving I will struggle to find the cash but on the other hand need to. Or is this a closed scheme anyway.

Do you have a business bank account? It was apparently a nightmare for anyone who didn't. I got a bounce back for one of my companies as we had to shut, issue a lot of refunds, and we just didn't have those sorts of cash reserves having just taken on a new premises. They asked what our annual turnover was and then we could borrow up to 1/4 of that, but I can't remember having to provide any evidence or anything. So we took more than we needed just for the refunds and paid off the company van too so we didn't have that payment each month when we had no idea when we would reopen. Glad we did too as our turnover is 96.8% down on 2019-2020 at the moment! I'd start with the bank you have your company accounts with but I'm afraid I'm not certain if they are still taking on new applicants.