When the availability of bounceback loans was announced, it was heralded as the way for small businesses to quickly and easily access loans of between £2,000 and £50,000 during the COVID pandemic. Undoubtedly, it has helped a significant number of small businesses to weather the storm that COVID brought on many.

There were concerns at the time that the speed and ease at which the loans could be obtained would be subject to abuse. Indeed, this was the tact of a Louis Glyn Maxwell who obtained a £50,000 bounceback loan through his car breakdown recovery business. Mr Maxwell did not use the funds to support his business and instead spent £22,000 on class A drugs and the rest on a tow truck (which he later sold to buy more drugs).

Having declared himself bankrupt in August 2021, Mr Maxwell was the subject of an investigation into his financial affairs by the Insolvency Service. Mr Maxwell is now subjected to six years of bankruptcy restrictions including being prevented from borrowing more than £500 without disclosing his bankruptcy status and a ban on acting as a company director without the court’s permission.  

Although it is perhaps the case that these are the least of Mr Maxwell's worries (he is also currently awaiting trial at Cardiff Crown Court on various charges including possession of drugs, driving offences, and theft), it is encouraging to see that the Insolvency Service are not afraid to use their investigatory powers to identify bounceback loan abuse. Sue Tovey of the Insolvency Service has said: "Taxpayers' money was made available to help genuine businesses get through the lockdown period and where there have been abuses, we will not hesitate to take action".

Unfortunately, in this case, I suspect that the prospect of the Insolvency Service recovering any funds from Mr Maxwell is highly unlikely and the taxpayers' have ultimately fronted the cost of Mr Maxwell's short-lived party lifestyle.