A Sunderland scaffolder is in trouble after it was found he applied for a government-backed £50,000 Bounce Back Loan he wasn’t entitled to.
The 34-year-old scaffolder was trading as LTH Scaffolding until December 2019 he started working with a separate company.
But this did not stop him from applying for a government-backed Bounce Back Loan of £50,000 in the name of LTH Scaffolding which he received on 12 May 2020.
The money was then used to repay third parties rather than to meet ongoing business costs.
The scaffolder was declared bankrupt on 26 October 2020. But due to his improper application for the Bounce Back Loan and the risk he posed to other creditors, the Official Receiver sought to extend his bankruptcy restrictions further.
The man’s bankruptcy undertaking extends his restrictions for 10 years, which means he is limited to what credit he can access, as well as not being able to act as a company director without the permission of the court.
Richard Gill, the Official Receiver, said: “Mr Hobson was not entitled to the loan as he had already stopped trading having taken up employment. This money was not used for the purpose it was intended.
Bounce Back loans are intended to enable businesses to survive the COVID-19 lockdowns and to be used to provide economic benefit for a business.
It is hoped that this Bankruptcy Restrictions Undertaking will act as a deterrent to others who may wish to abuse the government’s COVID-19 relief schemes.”