Small business owners are struggling to access government-backed loans as concerns about fraud and future defaults cause banks to restrict access to the scheme.

This week, the National Audit Office warned that up to £26bn of the £38bn already loaned under the bounceback loan scheme may never be repaid due to company failures and suspected criminal activity.

Although chancellor Rishi Sunak extended the application deadline until November 30, many banks are no longer offering bounceback loans or restricting them to existing customers. Businesses attempting to switch banks report long delays caused by the volume of applications and additional security checks.

“The system they’ve brought in to control potential fraud is now causing huge problems for valid claimants,” said Mr Bounceback, an anonymous businessman in the north of England whose website has helped thousands of people access the loan scheme. “People are watching the clock tick down on applications, and fear

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Quitting his IT job two years ago to start a beer tour business was a dream for Mike Hampshire.

But his hopes of breaking even in his second year of operation were crushed when the coronavirus crisis hit in spring.

Now the future of his Leeds-based business is in serious doubt as he’s been unable to get a bounce-back loan.

“Without a loan to tide me over I’m going to have to look for other work,” he said.

He’s not the only small business owner struggling to survive without being able to get a loan through the government scheme.

Mr Bounceback, an anonymous northern businessman behind a website which helps struggling small firms, said he has heard from lots of people with problems.

“Several banks are not accepting new customers, and the majority of them have chosen to only allow their existing customers to apply, or even worse some lenders

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