The Small Firms Loan Guarantee scheme underwrites 75% of loans to young businesses whose founders do not have enough assets to get traditional finance.
But Barclays is accused of lending £200,000 under the scheme to an established businessman whose net worth it had reckoned as being \”well over £20m\”. The bank is said to have hoped the loan would prop up Jeffrey Morris\’s business empire after becoming concerned that it might collapse.
If the government\’s handing out free money then of course stuff like this will happen.
And don\’t start bleating about how if it were a state owned bank then everything would be better. That would just bring politics into it: getting a loan would be a matter of supporting the right constituency party if the political control were local, the right national party if it were national.
Just look at what happened in Spain….