Fraud, Defaults and Scams, the true cost of covid19 !
In April 2020 the chancellor announced a series of rescue packages for UK businesses suffering due to the UK wide shut down.
The bounce-back loan being the most popular as it was easily accessed by any business with a bank account and a bank that was participating in the scheme.
Highlights included no interest for 12 months and no security, meaning you could close your company and not be liable for the debt.
Other loans were available such as the coronavirus interruption loan but these were more difficult to access.
Evidence had to be provided of a reduction in turnover and steps the business made to combat the downturn.
Bounce back applications were self-certified, provided your turnover was in a certain range and you were affected by the covid 19 shut down you were given the loan, great right?
Or maybe not…
1.5 million bounce back loans were issued to March 2021, companies were allowed to take between £2,000 and £50,000the total amount issued was £46.53 billion.
The national audit office says that up to £26billion of the loans taken may never be repaid.
The loans also offered a 12 month interest-free period costing UK taxpayers an additional £1billion.
The UK taxpayer could end up footing the bill for this £27 billion loss in loan defaults and interest.
With repayments now due in the summer of 2021 time will tell what the true cost is to our economy.