Director liability for government-backed lending
Directors may face personal liability for misuse, misrepresentation or other misconduct involving government-backed business loans. The loan itself does not normally make a director personally liable.
Related terms
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Government-backed loan
A loan made by a lender under a government-supported scheme where the state guarantees part of the lender’s exposure.
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Government guarantee
A commitment by government to cover an agreed part of a lender’s loss under a qualifying scheme. It does not normally remove the borrower’s repayment obligation.
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Scheme misuse
Use of a government-backed loan or support scheme contrary to its rules, eligibility conditions or stated purpose.
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