Official records reveal that Barclays Bank has sought winding-up against at least ninety-seven businesses since September 2022 as it looks to recover money loaned to small businesses to help them get through the pandemic.
Barclays Bank was the biggest lender in the Government’s Bounce Back Loan Scheme and issued almost 345,000 loans with a value of more than £10 billion.
Government Loan Scheme Under Fire
Under the government’s scheme, lenders were accredited to issue loans by the British Business Bank, a government-owned economic development bank, in 2020. The loans issued under the scheme were 100 per cent guaranteed by the government and banks could claim if the business failed to pay back the loan. However, the scheme came under criticism for putting taxpayer money at risk, especially when it emerged in March of last year that 11 per cent of all loans issued under it, with a value of £4.9 billion, could be fraudulent.
Barclays Targets Covid Fraudsters
Barclays Bank has now brought several petitions before a London court to liquidate companies to pay debts, all of which are related to Bounce Back loans. Firms were previously protected from some forms of creditor action by the Corporate Insolvency and Governance Act 2020, which was brought in during the pandemic, but those measures were phased out in March this year.
A spokesperson for Barclays indicated that while the Bank looks to support customers who are facing financial difficulty, including those who borrowed under government schemes, ‘in certain circumstances, including where there appears to be a misuse of funds, formal recovery action may be taken to recover taxpayers’ money’.
Energy Companies Also Seek Unpaid Bills
Energy companies have also been increasingly using legal action to pursue those companies that owed money for unpaid bills. At least 20 firms have been forced to close in recent months after energy companies filed winding-up petitions, according to a study from the accountancy firm Mazars.
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