More than 16,000 businesses which took out a UK Government-backed CV19 loan have gone bust without paying the money back.
This shocking figure emerged in an investigation by the BBC, which also found out that hundreds of directors who got loans they were not entitled to during the pandemic have also been disqualified.
The cost to the taxpayer of these insolvencies could be as much as £500million, and is likely to grow as more companies go under.
Questions are now being asked about what is being done to recoup the money.
The figures, obtained by the BBC under a Freedom of Information request, have been described as "shocking" by former head of the Serious Fraud Office Sir David Green.
He described checks the Government required banks to do on bounce-back loan applicants as "hopelessly inadequate".
A total of 1.5million loans worth £47billion were handed out. One of several measures designed to help businesses survive the pandemic, the loans were supposed to be paid back within 10 years. But, in the rush to save the economy, checks on borrowers were limited.
Loans of up to £50,000
Any small company could apply for a loan of up to £50,000 depending on its turnover. Applicants were allowed to "self-certify" the figures.
"You wouldn't send an army into battle without assessing the risks. And just the same in this situation, the risks, which were obvious, should have been assessed and addressed," said Sir David, who is now chairman of the Fraud Advisory Panel.
He believes bounce-back loan money must be recovered wherever possible.
The Government has said it will "not tolerate" people defrauding taxpayers.
The BBC has been investigating what will happen to the hundreds of millions of pounds of taxpayer money given to companies which have since become insolvent.
The majority of those businesses went bust for legitimate reasons - however there is increasing evidence that a proportion of bounce back loans were misused.
The BBC has discovered that hundreds of company directors have so far been disqualified from running businesses.
Not eligible for cash
And many of those firms were not eligible to receive the loans in the first place.
Previous research shows that 45% of successful applicants to two banks showed no evidence of trading at the relevant period.
On the website of the Insolvency Service, the BBC found scores of company directors who took out loans with, it seems, little or no prospect of being able to repay them.
A request under the Freedom of Information Act reveals that, so far, 260 directors have been disqualified with their companies still owing a bounce-back loan.
Loans were spent on everything from gambling debts and cryptocurrency schemes - to cars, house renovations, even flying lessons.
Several agencies have been tasked by the Government with investigating Covid loans and getting back the money.
Sir David believes organised criminal gangs have had a field day.
He added: "Fraud is opportunistic and organised-crime groups are experts at that opportunism."
But he thinks that, with limited resources, police should target the worst offenders, while company directors who did not play by the rules should be pursued through the civil courts.