Lenders in the UK handed out more than 130 million pounds under the UK government’s 26.4 billion-pound Coronavirus Business Interruption Loan Scheme (CBILS) to companies with similarly questionable claims, despite a requirement that borrowers had to be negatively affected by the pandemic, Report informs referring to Bloomberg.
One emergency loan, for 4.7 million pounds, went to a firm founded just two days before it received the funds, corporate records show. And a 1 million-pound loan went to a company that was dormant before the pandemic’s onset and then went into voluntary liquidation less than a year later.
Under CBILS, banks loaned up to 5 million pounds to eligible small businesses, at interest rates set by lenders. The government-guaranteed 80% of the facilities.
None of the borrowers has been accused of wrongdoing in connection with their obtaining the loans, and individual lenders are not named in the EU loan records.
The Department for Business, Energy & Industrial Strategy, which oversees the British Business Bank, or BBB, and was ultimately responsible for the emergency loans, is “continuing to crackdown on Covid-19 fraud and will not tolerate those that seek to defraud the British taxpayer,” a spokesman said. “We are working closely with lenders and enforcement authorities to detect and investigate fraud.”