Skip to main content

Bounce Back Loan Fraud

The impact on the economy of Covid-19 has been detrimental and far reaching. With the UK being officially in recession for the first time in 11 years, the Government has implemented a number of packages in order to help businesses survive these tough times, one of these is the Bounce Back Loan Scheme.


  • This article covers:
  • What is a Bounce Back Loan?
  • Why do companies require a Bounce Back Loan?
  • What are the requirements to obtain a Bounce Back Loan?
  • Why is the scheme at risk?
  • What types of fraud is the scheme vulnerable to?
  • How can that risk be minimised?


  • Fraudsters have been using the Bounce Back Loan initiatives to defraud both the Government and other businesses.
  • It is hard to ‘police’ these applications due to the speed at which the scheme was set up and its lack of transparency.
  • Vigilance is key in defeating these fraudsters who seek to make a gain from others’ hardship.

What is a Bounce Back Loan?

One initiative brought in under the Government’s COVID-19 response, is the Bounce Back Loan Scheme (“BBLS”). The BBLS is supported by the UK Government and allows eligible businesses to borrow between £2,000 and 25% of their turnover. The maximum loan is £50,000. There will be no fees or interest for the first 12 months and after 12 months the interest rate will be 2.5% a year.

The scheme launched on the 4 May 2020 and companies are able to access the loans through accredited lenders, of which there are currently 14. In the first 6 weeks of launch 860,000 loans were approved. In order to be eligible for the BBLS your business has to be:

  • UK based;
  • trading before 1 March 2020; and
  • adversely impacted by COVID-19.

Rishi Sunak stated that “This new rapid loan scheme will help ensure that they (small businesses) get the finance they need quickly to help survive this crisis”.

In addition, borrowers are required to declare that the business:

Realistically very little is required in terms of paperwork
and the result is that businesses are effectively
self-certifying. The limited due diligence means that there are unscrupulous individuals out there who will
seek to take advantage of this new scheme.

  1. Has not have received a loan under the Coronavirus Business Interruption Loan Scheme (CBIL), unless you are refinancing it with a BBL;
  2. Was not in difficulty as at the 31 December 2019 (as further checks would apply);
  3. Is going to use the BBL to support trading or commercial activity in the UK (it is not for personal use and must not be used as such);
  4. Is solvent at the time of submitting their loan application; and
  5. More than 50% of the income is derived from trading activity.

BBL Fraud

Unfortunately, there are any number of ways in which the BBLS can be exploited and these are just a few examples of the frauds which have been attempted (and some succeeded) so far:


In any time of crisis,  there are those who will seek to take advantage of schemes that are meant to help businesses and individuals in need.  We can only hope that vigilance is maintained, and transparency will certainly assist that goal.

Should you require assistance in understanding issues arising from the Bounce Back Loan scheme, please do not hesitate to get in touch at

Published on September 15, 2020

Contact details

Phone: 0121 796 4020


Fax: 0843 216 4240


Tenet Compliance & Litigation Limited
Sterling House, 71 Francis Road, Edgbaston, Birmingham B16 8SP


Copyright © Tenet Law. All Rights Reserved.

Tenet Compliance & Litigation Limited. Registered Office, Sterling House, 71 Francis Road, Edgbaston, Birmingham B16 8SP. Registered in England and Wales. Registered No: 09776405. Authorised and regulated by the Solicitors Regulation Authority. SRA Identification No. 626562.

Created by Gritt & Co