Mohammed Abdul Subhan, of Lodge Road, West Bromwich, started an independent catering business called Thania Spice in 2016 before incorporating Zara Spice Limited, which was a restaurant in Bilston Street, Dudley, and has since closed permanently.
In 2020, the 47-year-old has once again focused his attention on his freelance business.
But in March this year, Subhan was unable to pay his debts and filed for bankruptcy of his own.
The Insolvency Service says the official receiver was appointed as its trustee before it discovered Subhan misused £70,000 in loans.
Subhan said Thania Spice had a turnover of £200,000 and secured the maximum £50,000 rebound loan – a scheme designed to give businesses faster access to funding during the coronavirus outbreak.
However, his actual turnover was closer to £3,000-£4,000 in 2019, which would not have made him eligible for the government guaranteed loan.
The caterer also did not use all the money for the benefit of the company, contrary to the terms of the Bounce Back program, having withdrawn the funds in cash.
Further investigations by the official receiver revealed that when the government loan ran out in November 2021, Subhan inflated his income and applied for two more loans worth £20,000 – despite being insolvent.
The Insolvency Service said it withdrew more than half of the funds in cash and used £13,500 for ‘non-essential expenses’.
Because of the risk it posed to creditors, the Official Receiver sought to impose additional bankruptcy restrictions on Subhan.
He recently had his 11-year bankruptcy restriction pledge accepted by the Secretary of State, which means he is limited to the credit he can access.
It also prohibits him from being able to act as a business executive without the authorization of the court.
Deputy Receiver Karen Fox said: “Throughout our investigations, Mohammed Subhan has not provided sufficient evidence of the use of the loans, whether it benefited the business or that it reasonably expected to repay the loans.
“He posed a significant risk to creditors and 11 years of restrictions will significantly reduce Mohammed Subhan’s ability to abuse his future lenders.”