Read on for the details of this case, along with the Liquidators comments
Liquidators Comments
Overview of the Case
On 6 October 2020 David Foster caused Infrastructure Delivery Solutions Ltd (“Infrastructure”) to breach the conditions of the Bounce Back Loan (“BBL”) scheme by applying for a second BBL for £50,000 when he knew or ought to have known that Infrastructure failed to be eligible for the loan.
In addition, when obtaining both BBLs on 19 September 2020 and 6 October 2020 Mr Foster overstated Infrastructure’s turnover on the applications.
Consequently Infrastructure received more money than it was entitled to from the BBL scheme.
In that;
- The terms of the BBL scheme included that 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) and that a business should not apply for a loan if it is already in the process of applying for, or has already received a BBL as under the scheme it could only have one BBL.
- Accounts for period from 17 October 2018 to 31 October 2019 show a turnover of £117,563.
- An analysis of Infrastructure’s bank account shows that in the calendar year 2019 £138,385 was received into the bank account and Infrastructure’s Sage accounting package recorded its sales as £139,257.
- Mr Foster knew or ought to have known that the maximum BBL Infrastructure was entitled to was £34,814.
- On 19 September 2020 Mr Foster signed a BBL application to Bank A for the maximum amount of £50,000 using a turnover figure of £265,000 with the proceeds received on 22 September 2020.
- Despite Infrastructure obtaining a BBL on 22 September 2020 for £50,000 with Bank A, on 6 October 2020 Mr Foster caused Infrastructure to obtain a second BBL with Bank B for £50,000 in the knowledge that the company had already received the maximum BBL available from Bank A
- At liquidation Infrastructure had liabilities totalling £204.668 including £100,057 owed in respect of the two BBLs.
