It’s hard to believe that the government’s Bounce Back Loan Scheme (BBLS) was introduced more than five years ago. At the time, it served as a lifeline for many small businesses just trying to stay afloat during lockdown. However, as many feared, some directors saw it as a free cashpoint rather than an emergency loan. Fast forward to today—how much has been recovered, and what steps are being taken to deal with the fraudsters?
Where are we with repayments?
According to the British Business Bank’s repayment dashboard (to March 2025), £46.5 billion was borrowed through the BBLS. The encouraging news: nearly 70% of loans have either been fully repaid or being repaid as agreed. The less encouraging news: £1.88 billion has been flagged as “suspected fraud”, and the government has already covered £11 billion in guarantees to lenders. In other words, while most borrowers are acting responsibly, a significant minority has left the taxpayer footing the bill.
If you like neat stats, the estimated fraud loss rate for BBLS is 3.36% of the total amount borrowed. That doesn’t sound alarming at first—but remember, 3.36% of £46 billion is still an eye-watering sum.
Directors in the dock
So, what’s happening to directors who misused COVID loans? The Insolvency Service has been active. In 2024/25 alone, over 1,000 directors were disqualified, and 736 of those bans were specifically for abusing COVID support schemes. On average, those bans last around nine years—grounding some directors well into the 2030s.
Criminal cases are also starting to come through. Since 2022, there has been at least 47 convictions tied to fraudulent Bounce Back Loans, with the Insolvency Service now handling dozens of prosecutions each year. Not everyone ends up behind bars, but for those who do, the “cheap loan” turns out to be very costly.
Chasing the money back
Recovering the money has proved to be just as complicated as catching fraudsters. By spring 2025, almost 13,000 loan guarantees (worth £451 million) had been withdrawn from lenders after banks failed to follow the rules properly. While that doesn’t bring money back, it does reduce the taxpayer’s burden and puts pressure on lenders to chase debt more proactively. The government has also promised to take a tougher stance, including the appointment of Tom Hayhoe as the COVID Counter-Fraud Commissioner, to coordinate recovery efforts.
Fraud didn’t start or stop with COVID loans. According to the Office for National Statistics, fraud and computer misuse now account for a significant share of the UK’s 9.5 million headline crime incidents each year. And here’s the kicker: only around one in seven fraud offences are reported to the authorities. In other words, the cases you hear about may just be the tip of the iceberg.
What it means for Credit Professionals
For those in credit management, there are a few lessons here:
- Scrutiny is sharper than ever. If Bounce Back Loans or other COVID funds were involved, lenders and the Insolvency Service are more likely to probe director behaviour.
- Paperwork still matters. Clear records of decisions and cashflow are the best defence against accusations of misuse in those grey-area cases.
- Recovery is a long game. Enforcement now depends on compensation orders, asset recovery, and slow but steady collections.
Five years later…
So, five years down the line, the picture remains mixed. Most bounce back loans are being repaid as intended, but billions have been lost to fraud and default. The Insolvency Service is disqualifying directors at record rates, criminal prosecutions are ramping up, and lenders are being pushed to do more. It’s not exactly a Hollywood-style fraud bust, but the message is clear: if you treated your Bounce Back Loan like free money, the knock on the door might still be coming.
References
- British Business Bank, Loan Schemes: Repayment Data to 31 March 2025
- UK Parliament, House of Lords Written Answer on Fraud Loss Rates (CBILS/BBLS/CLBILS), 2024
- Insolvency Service, Annual Report 2024/25 (director disqualification statistics and COVID-related bans)
- UK Government, FOI disclosures and ministerial statements on BBL-related convictions, 2022–2024
- Office for National Statistics, Crime in England and Wales: Year ending September 2024
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