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Friday, November 25, 2022

Sole traders face being named if they took out Covid-19 loan


By Tim Adler on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

Sole traders Covid-19 concept. Anonymous silhouettes with question mark on them

Thousands of sole traders who took out a Covid-19 loan could have their names revealed if a pressure group wins an appeal next week.

An appeal tribunal could agree with anti-corruption campaigners Spotlight on Corruption that the British Business Bank, which oversaw £47bn worth of Covid loans being given to small businesses, must reveal the names of some or all or the 1.7m businesses which borrowed money.

Spotlight on Corruption is pushing for the BBB to comply with a freedom of information request it lodged two years ago. But the bank rejected the request – a decision which was upheld by regulator the Information Commissioner’s Office (ICO).

>See also: Banks to get tougher on bounce back loan defaulters

The fear is that many of those who took out Covid-19 Bounce Back Loans were sole traders, and that publicly naming them could make them easy pray for fraudsters.

Not only that but small businesses that helped themselves to Government-backed Covid-19 loan support never agreed to have their names revealed at the time – a clear conflict between freedom of information and confidentiality rules, one banker told the Financial Times.

Yet official estimates suggest the UK taxpayer faces losses of almost £5bn from fraudsters who exploited minimal checks BBLs, and it’s hoped that naming-and-shaming companies which abused the scheme could help investigators.

>See also: What happens if I can’t repay my Bounce Back Loan?

The British Business Bank already publishes names of companies that borrowed from other Covid-19 schemes, including Coronavirus Business Interruption Loans (CBILs).

The appeal hearing is scheduled to last three days.

Further reading

Government Bounce Back Loan for your small business

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Tim Adler, Khareem Sudlow