Businessman used £ 100k Covid loan for personal use

A RUTHERGLEN man was found to have applied for two £ 50,000 business loans he wasn’t entitled to and used the cash for personal benefit.

John Gerard McGarvey has been disqualified as a director for 11 years following the discovery.

The 37- year- old was the sole director of CKO Civil Engineering and Surveying Limited, which was incorporated in October 2019 and ran as a surveyor’s firm based in Kirkintilloch.

CKO applied for a Bounce Back Loan of £ 50,000 in July 2020, with McGarvey stating the company had a previous year’s turnover of £ 225,000.

The government- backed loans were introduced to support businesses through the pandemic.

Companies could apply for loans of up to 25% of their 2019 turnover, allowing them to borrow a maximum of £ 50,000, as long as the money was to be used for the economic benefit of the business. Businesses were not allowed to apply for an additional loan unless they had originally borrowed less than the maximum amount.

But CKO applied for a second loan of £ 50,000 just four weeks later, and this time, McGarvey applied to a different bank and stated that the business had a previous year’s turnover of £ 218,000.

The company struggled to survive post- Covid and went into liquidation owing around £ 183,000, which triggered an investigation by the Insolvency Service.

It was discovered that McGarvey had applied for two loans – which was against the rules of the scheme – and had exaggerated CKO’s turnover both times.

The company’s most recent accounts showed a turnover of only around £ 46,400.

They also discovered that McGarvey had used the full £ 100,000 for his own gain, rather than to support his business.

Steven McGinty, investigation manager, said: “Not only did

John McGarvey grossly exaggerate the company’s turnover to secure an initial loan, he also applied to a second bank for another loan his company wasn’t entitled to.

“To compound his actions, he used the money for his personal gain.

“His ban should serve as a warning that if you abuse government support, we will use our full powers to bring you to account.”

The Secretary of State accepted a disqualification undertaking from John Gerard McGarvey after he did not dispute the findings of the investigation.

It prevents McGarvey from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.

If you abuse government support, we will use our full powers to bring you to account