On 19 January 2026, Swansea Crown Court ordered Haverfordwest-based director Zahid Afzal to repay £197,306 within three months after abusing the government’s Bounce Back Loan scheme. According to the Insolvency Service, he faces two years in prison if he fails to pay, and the debt remains due even if he serves time. ([gov.uk](Link

Afzal went on to secure three extra £50,000 loans between May and November 2020 despite his companies already accessing support. He told lenders neither firm had borrowed before, inflated turnover for Phones Onn Ltd to reach the £50,000 cap, and moved significant sums to personal accounts-breaching rules that spending must benefit the business. He had earlier obtained £52,500 legitimately across Phone Bits Ltd (£32,500) and Phones Onn Ltd (£20,000). ([gov.uk](Link

He received a two-year suspended sentence and 300 hours of unpaid work in June 2025 for fraud by false representation. Investigators then used Proceeds of Crime Act powers to freeze assets ahead of this week’s confiscation order, which includes indexation to reflect price changes since 2020. ([gov.uk](Link

For owners and finance leads, the compliance line is clear: one Bounce Back Loan per company; funds must be for the economic benefit of the business; and turnover claims need records to match. Insolvency Service guidance classifies false applications, personal use and dissolving a company to avoid repayment as misconduct that can lead to disqualification or court orders. ([gov.uk](Link

The recovery playbook matters here. Restraint orders can stop funds being moved; confiscation orders aim to recover benefits from crime and still apply even if a debtor later serves time for non-payment. That is why these cases continue years after the loans were first paid. ([gov.uk](Link

Scheme-wide data show the scale. By 30 June 2025, lenders had flagged around £1.88bn of the £46.48bn issued under Bounce Back Loans as suspected fraud. The government guarantee had been settled on 25.77% of facilities by volume, including £1.57bn linked to loans marked as suspected fraud. ([gov.uk](Link

Independent scrutiny paints the wider picture: the Covid Counter-Fraud Commissioner estimated £10.9bn lost to fraud and error across pandemic support schemes, with Bounce Back Loans among the riskiest. About £1.8bn had been recovered by late 2025, with ministers promising a tougher chase. ([ft.com](Link

Officials say the enforcement toolkit is improving. The Cabinet Office reported roughly £480m prevented or recovered in the year after April 2024 through stronger data-matching and AI, while the Public Authorities Fraud, Error and Recovery Bill is due to add new powers from 2026. ([gov.uk](Link

But not every approach has worked. The National Investigation Service-set up to pursue bounce-back fraud-recovered only £7.2m before being shut in May 2025, with cases moved to the Insolvency Service. ([thetimes.co.uk](Link

For SMEs, the practical checklist is simple: ring‑fence loan funds for genuine business costs, reconcile turnover claims to VAT returns and bank statements, keep supplier evidence, and speak to lenders early if repayments bite. Around 36.67% of BBL borrowers have used Pay As You Grow options, so early engagement is normal, not unusual. ([gov.uk](Link

For taxpayers, the design of 100% state guarantees meant defaults could quickly become public liabilities. As of June 2025, guarantees had already been called on more than a quarter of BBL facilities by count-underlining why asset recovery cases like Afzal’s will keep coming. ([gov.uk](Link

Afzal now has until 19 April 2026 to pay. If he does not, he risks a two‑year sentence for non‑payment while still owing the money. Expect more court-driven recoveries as investigators revisit 2020-era loans and pursue confiscation orders where assets can be traced. ([gov.uk](Link