On top of the £4.3 billion in Covid loans lost to fraud, the Treasury may have to write down £20 billion in Covid-19 financial support.

More than half of the £47 billion lent through the Bounce Back Loan program.

And this is in addition to the £18 billion in Bounce Back Loans that the business department has budgeted for not being returned.

>See also: Banks to Toughen Their Approaches to Recovering Loan Defaulters

Lord Agnew of Oulton, the counterfraud minister, quit last month, citing his dissatisfaction with “schoolboy blunders” in the management of the Covid loan fraud, which he predicted would result in billions of pounds in losses.

Small businesses struggling to repay Covid loans, not fraud, is the focus of accountancy firm Azets.

A “significant and increasing number of firms are already struggling to meet their loan repayments” on the Bounce Back Loan and Coronavirus Business Interruption Loan Schemes, according to Duncan Swift, restructuring and insolvency partner at accountants Azets.

£47 billion was lent through 1.6 million loans, with the taxpayer giving a 100 percent guarantee; a further £26 billion was lent through 110,000 CBILs, with the state providing an 80 percent guarantee.

Companies, particularly small enterprises, “have suffered an incredibly difficult two years. While many have closed, those that have endured have only managed to survive due to loans and other Government-backed interventions,” Swift added. We estimate that up to £20 billion in Coronavirus Business Interruption Loans and Bounce Back Loans will be defaulted across the UK.

“While most business owners have no intention of defrauding their customers, a growing number are discovering that their company lacks the assets, cash, or income to meet loan payback demands and deadlines.”