The amount of bounce back loans fully repaid is just 13% out of the £46.9bn handed out to companies during the pandemic.
Despite £46.9bn being handed out in bounce back Loans during the pandemic, only 13% have been fully repaid. While nearly three-quarters of borrowers are on track to repay, a significant £39.9bn remains outstanding.
Across all three Covid loan schemes, totalling £76.9bn, £21.5bn has been fully repaid. However, £1.88bn is currently in arrears, with a further £580 million defaulted. Suspected fraud has been flagged for £1.91bn of loans.
The Government has banned 831 company directors for fraudulent Covid loan applications, an 80% increase from the previous year. Banks refused £2.2bn worth of loans due to concerns about repayment, preventing further potential losses.
While bounce back loans accounted for most of the loans, fraud was more prevalent in smaller business loans. Larger businesses utilising the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruptions Loan Scheme (CLBILS) saw less fraud. Of the £25.8bn lent through CBILS, 38% has been repaid, with 1.49% in arrears and 1.2% defaulted. CLBILS, with £4.5bn lent, saw no reported fraud.
Dean Beale, chief executive at the Insolvency Service said:
"Tackling bounce back loan misconduct is a key priority for the Insolvency Service, and we are determined to use all our available powers to remove rogue company directors from the corporate arena."
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