Banks start to act on COVID bounce-back loans

Banks have begun legal action to regain the state-backed loans they administered during COVID.

Starling Bank, Barclays and HSBC have filed winding-up petitions against nearly 70 companies that have defaulted on loans, reported the Financial Times.

It says that government pressure has pushed them to go after debtors, especially small businesses that appear to have been dormant for years or those that failed to file accounts.

At least £2.8 billion was lost through the business Bounce Back Loans aimed at supporting floundering businesses through COVID.

Although administered by the high-street banks, the taxpayer underwrote the loans.