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CBILS loan fraud could top £130m

Funding, Economy

A new investigation has found that over £130m was given to zombie companies or companies with no track record under the coronavirus business interruption loan scheme (CBILS). According to a review by Bloomberg News, a number of companies have claimed emergency funding despite not trading for years. Other companies claimed millions of pounds in government-backed loans just days after the company was founded. One emergency loan, for £4.7m, went to a firm founded just two days before it received the funds, corporate records show. Another £1m loan went to a company that was dormant before the pandemic’s onset and then went into voluntary liquidation less than a year later, Bloomberg found. At least 60 dormant companies were approved for CBILS funds, the review found. More than 85 companies had only been in existence for weeks, or at most a few months, before receiving loans under CBILS. The review covered approximately 45% of total CBILS borrowers – more then 49,000 companies. The Copenhagen Business School assisted Bloomberg by providing an initial dataset.

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