On Monday 7th February, Malcolm Niekirk held one of his popular Coffee Break Briefing Webinars.
In the webinar, Malcolm looked at a hot topic – Bounce Back Loans (BBL). Malcolm provided an overview of BBLs, looked at their status as unsecured and discussed some of the misuses and abuses of the loan.
Here's the summary of the presentation…
An overview of Bounce Back Loans and other emergency funding
There were around 30 or so government backed schemes for coronavirus emergency funding. Most of these are now closed.
Mostly, if they were open for more than a very short time, the rules changed over time to –
- Narrow down the options and make them more restrictive
- In a few cases, to open them up a bit
Some of the schemes were discretionary, others had a defined entitlement, meaning that you would be entitled to the funding if eligible.
Most of them were open, in various ways, to abuse or misuse.
Emergency grant funding
I’ve listed some of the grants and concessions below…
- Furlough
- Coronavirus Statutory Sick Pay Rebate Scheme
- Omicron Hospitality and Leisure Grant
- Christmas Support Payment for wet-led pubs
- VAT concessions; HMRC time to pay
- Local authority discretionary grant schemes
- Business rates relief
- SEISS – Self-employment income support scheme
- Eat out to help out
These were not normally repayable; it was it was it was essentially free money.
Ineligible claimants of COVID grants
You might find a case where the grant was claimed when the company was ineligible.
You might find this with a SEISS when you're dealing with the liquidation of a limited liability partnership. Because, of course, the SEISS was available to members of LLPs, as well as partners in traditional partnerships and self-employed sole traders.
After November 2020, the SEISS scheme was restricted so that:
- Businesses must have been trading, or intending to trade; or
- If they weren’t trading, their profits needed to be significantly reduced from covid
After February 2021, people were eligible only if self-employment was most of their income.
So if you're dealing with an LLP, you might see information that was false when the partners applied for their funding. You might have to report fraud in a case like that.
This article is very long and comprehensive, so we couldn't include it all here. In the full article, Malcolm looks at whether BBLs are secured or unsecured loans and discusses the implications of the loans for IPs. Read it here.