A Scunthorpe student has been placed under nine years of bankruptcy restrictions after claiming a £50,000 government loan for a business which did not exist, and spending nearly £30,000 of it on a car.
Kurt John Barkhuizen, 28, applied for and received the Bounce Back Loan in June 2020, at a time when small and medium-sized businesses were able to borrow between £2,000 and up to 25% of their turnover to help recover from the effects of the coronavirus pandemic. The maximum loan available was £50,000.
Barkhuizen was not running a business at the time and was not eligible for any funding through the scheme, which was providing assistance to companies during the pandemic.
The Insolvency Service looked into the case when Barkhuizen petitioned for bankruptcy in April 2021, with debts in excess of £30,000 on top of the Bounce Back Loan.
When questioned, Barkhuizen said he had intended to sell his home to clear his debts and start a car dealership business, buying and and selling second-hand cars using his mechanic skills.
He told investigators he had been clear to the lender his business was not yet trading at the point he applied for the loan.
He said he had not been able to proceed with his business plans due to the start of the pandemic, as lockdown meant car auctions were cancelled. The sale of his house also fell through.
However, he spent nearly £30,000 of the Bounce Back Loan to buy and insure a car, which he then sold for £10,000. Barkhuizen spent just over £8,000 on services for his would-be business, including premises, a van and tools.
He also made payments of more than £4,300 to creditors, but used the remainder of the funds on living expenses.
The Secretary of State for Business, Energy and Industrial Strategy accepted a nine-year bankruptcy restrictions undertaking from Barkhuizen, which commenced on February 7, 2022.
This means Barkhuizen is under a number of restrictions, including not being able to borrow more than £500 without disclosing his bankrupt status. He also can’t act as a company director without the court’s permission.
Fiona Newman, deputy official receiver at the Insolvency Service, said: “Kurt Barkhuizen took out a Bounce Back Loan but failed to ensure this was used for business purposes as the terms of the loan set out. He also had considerable debts at the time and has failed to return any money to creditors. We will not hesitate to impose bankruptcy restrictions in these circumstances.”