Read on for the details of this case.
Ms Melissa Jayne Commercial (“Ms Commercial”) breached the terms of the Bounce Back Loan (“BBL”) scheme by causing Commercial&Co Ltd (“C&C”) to overstate its turnover on its application for a BBL, resulting in the company receiving a BBL of £50,000 when she knew, or ought to have known, that C&C was not eligible for a loan of that value.
In addition, Ms Commercial failed to ensure that the entirety of the BBL was used for the economic benefit of C&C contrary to the terms of the scheme
In that:
- The BBL scheme terms allowed businesses to receive a loan of up to 25% of their annual turnover for the 2019 calendar year, which the applicant would self-certify when completing the BBL application.
- If a company was established after 01 January 2019, they were allowed to estimate the company turnover from the date the company started to trade.
- C&C was incorporated on 04 March 2017.
- Ms Commercial declared on the company’s BBL application form an annual turnover of £209,000 for 2019, and consequently on 03 July 2020 C&C received a £50,000 BBL.
- Annual accounts for FYE 30/03/20 show the company achieved a turnover of £97,917.
- This would have meant the company was eligible to apply for a BBL of up to £24,480.
- The overstatement of turnover totalling £111,083 meant that C&C received £25,520 more than it was entitled to from the BBL scheme.
- The terms of the BBL scheme stated that the BBL was to be used only for the economic benefit of the business, used wholly for business purposes and not personal purposes.
- Between 06 July 2020 – 13 July 2020, Ms Commercial caused C&C to make payments of £52,700 to herself.
- Of the £52,700 transactions, at least £41,430 came from BBL funds.
- These transactions were not for the economic benefit of C&C and were contrary to the terms of the scheme.
- At liquidation, C&C had liabilities totalling £55,154.32, of which £50,124.58 was owed to the bank in respect of the BBL.
