My inbox lit up yesterday with messages from 100’s of people worried about repaying their Bounce Back Loans, as some newspapers have started to name and shame and put up photos of those that have deemed to have committed some form of wrongdoing with their Bounce Back Loans.
If you are worried, then be aware that those they have named and shamed are only those that have already gone through the winding up process with their businesses or have declared bankruptcy, and it was the Insolvency Service that deemed them to have committed some form of wrongdoing with their BBLs.
As you may be aware I too have been keeping track of those who have been hit with a long BRO or long Disqualification or have had to default on their BBL’s legitimately when winding up their business, but it is only those that didn’t follow the rules or out and out cheated the system that are being named and shamed by the press and the Insolvency Service.
You can find the current tally of those defaults on the following link:
https://mrbounceback.com/bounce-back-loan-defaults-tracker/
As it stands, despite certain MPs badgering the Government to name everyone with a Bounce Back Loan, whether they have defaulted or not, only those that have received State Aid of over €100,000 (or €10,000 if their business is in Fisheries or Agriculture) that are going to be publicly named on the Government Transparency website.
You can find more on that story via the following link:
As such if you do have a Bounce Back Loan then the fact you do should be a private affair between you and the bank.
What is the Wrongdoing?
There is all manner of different examples given for the “wrongdoing”, the one I have seen repeatedly used for hitting a LTD Company Director with a huge disqualification is using a Bounce Back Loan for personal benefit and not the benefit of the business.
Also, over-egging the turnover to obtain a loan is another example. There are others including not keeping proper accounts, not telling the Insolvency Service how a BBL was used etc.
Keep in mind that estimated turnover could have been used if your business was a recently launched one as per the rules of the scheme, and HM Treasury did confirm with Martin Lewis he of Money Saving Expert fame a BBL could be used to pay wages, but there are different rules associated with Sole Traders and LTD Company Directors (see link below).
If you have done no wrong and are struggling to repay your loan then be aware of the PAYG options, which I am sure many of you are currently using, and if you have done no wrong and do end up going bust/winding up your company then you have nothing to fear regarding being hit with a huge BRO or Disqualification.
I say that as I know many people are having sleepless nights currently, and Rishi Sunak needs to address the problem of legitimate businesses struggling with their BBL debt rather than just ignoring the issue. Some MPs, for what it is worth, are badgering him to make changes to the scheme to allow for additional forbearance and/or additional BBL options, but it is down to him to make such changes before the number of defaulters skyrockets, which it will do quite naturally if he doesn’t act and act soon.
You can view the rules of the BBL scheme on the British Business Bank website here:
The Martin Lewis article mentioned about re using BBL funds to pay wages etc can be found on the link below:
https://www.moneysavingexpert.com/news/2020/05/small-business-boost-as-bounce-back-loans-launched/
Article in the Daily Mirror:
Exclusive: Faces of bosses who pocketed Covid cash as up to £27bn of taxpayer loans lost
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