The Bounce Back Loan Scheme (BBLS) enables businesses to apply for a loan if they meet three key criteria: the business is based in the UK; was established before 1 March 2020; and has been adversely impacted by coronavirus. For most businesses, the combined loan amount must not exceed 25% of the original self-certified annual turnover, or £50,000, whichever is lesser.
The BBLS provides the lender with a government-backed, full guarantee (100%) against the outstanding guarantee facility. Many financial institutions are participating in the scheme including leading retail banks. To apply for a bounce back loan, interested parties need to approach a lender directly and fill in a short online application form for their business, self-declaring that they are eligible.
The nature of the BBLS Scheme – particularly the availability of ‘self declarations’ – leads to these schemes being vulnerable to allegations of fraud and dishonesty.
The National Crime Agency is reporting numerous arrests for BBLS fraud, the first being a Hertfordshire-based individual in October 2020. NCA Branch Commander, Simon Gower, said: “This arrest is the first by the NCA in relation to potential fraud against the Government’s Bounce Back Loan Scheme. The man arrested is suspected of falsely applying for the loan and allegedly using the money on personal items.”
Following these initial accusations of people illegally taking advantage of BBLS, we anticipate many more arrests by the NCA, as well as investigations by HMRC.
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