Equifax Reduces BBL Fraud Figures Again
According to new research, only 0.3% of bounce loans were acquired fraudulently.
According to the latest Equifax Market Pulse series, just 0.3% of businesses that received a bounce loan were found to have taken out loans in excess of the program’s £ 50,000 cap.
Meanwhile, only 0.4% of loan recipients got bounce loans from multiple vendors.
Equifax also found that “a relatively small 12 percent of businesses with a bounce loan consistently spend more money than they generate each month.”
Last month, Equifax estimated that levels of application fraud are likely to be as low as 0.5% for bounce loans.
“Despite some speculation about the misuse of the UK government’s rebound loan program, a look under the cover shows that fraud levels are likely to be significantly lower than fears,” said Andrew Fielder, expert in commercial loans from Equifax UK.
“It is clear that the amount of fraud is too high and the extent of the losses will not be known until borrowers start repaying in early May, but the data suggests that lenders’ checks have halted the worst cases. more serious.
“It is extremely encouraging to see that the program is working as intended, helping otherwise viable businesses hit hard by Covid-19 restrictions to stay afloat.”
Equifax research also found that the majority of rebound loan recipients continued to plunge and come out of the red month after month. Over a six-month period, only 2% of businesses were consistently in positive financial territory, while only 24% reported positive free cash flow in four months or more.
“The outlook for many companies is still deeply uncertain,” added Fielder.
“There are rough waters to move forward as the economy emerges from foreclosure restrictions, and big data insights will continue to be vital in shedding light on the health of the business credit market in China. evolution.”
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