Read on for the details of this case, which is another one involving the over-estimation of a permitted estimated turnover used to get a Bounce Back Loan.
On 30 June 2020, Alexei Coada (“Mr Coada”) caused Dinamic Construction Ltd (“Dinamic”) to apply for a Bounce Bank Loan (‘’BBL’’) of £50,000 using overstated turnover figures in the application form and as a result Dinamic received at least £41,340 more BBL funds than it was entitled to, and it failed to ensure that the funds were used for the economic benefit of the business.
In that:
- Under the BBL scheme, a business could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover in calendar year 2019 or where a business was established after 1 January 2019, it is their estimated turnover from the date the business started.
- Dinamic was incorporated on 15 February 2019, and Mr Coada stated it started trading the same date.
- Mr Coada was appointed as the sole director throughout trading.
- On 30 June 2020, Mr Coada applied to HSBC for a BBL in the sum of £50,000 having stated that Dinamic’s turnover was £235,000
- The BBL proceeds of £50,000 were received on 08 July 2020.
- Accounts for the year ending 28 February 2020 show turnover of £34,638
- Based on the above accounts Dinamic was eligible for a maximum BBL of £8,660.
- Bank statements show that from 04 November 2019 to 07 July 2020, there was no trading activity through the account.
- By applying for a BBL of £50,000 Dinamic received £41,340 more than it was entitled to.
- Between 09 July 2020 and 02 March 2021, there were no credits from trading activities whilst £56,517 was paid out to parties unknown and no evidence has been provided that the BBL funds were used for the benefit of the business.
- At liquidation, no repayments had been made in respect of the BBL
