Mohammed Abdul Subhan, of Lodge Road, West Bromwich, started a self-employment catering business called Thania Spice in 2016 before incorporating Zara Spice Limited, which traded as a restaurant from Bilston Street, Dudley, and has since permanently closed.
In 2020, the 47-year-old focussed his attention back to his self-employment business.
But by March this year, Subhan could not pay his debts and applied for his own bankruptcy.
The Insolvency Service said the official receiver was appointed as his trustee before uncovering that Subhan had abused £70,000 worth of loans.
Subhan declared that Thania Spice had a turnover of £200,000 and secured the maximum £50,000 Bounce Back Loan – a scheme which was designed to enable businesses to access finance more quickly during the coronavirus outbreak.
However, his actual turnover was closer to between £3,000 and £4,000 in 2019, which would have not made him eligible for the government-backed loan.
The caterer also failed to use all the money for the benefit of the business, contrary to the terms of the Bounce Back scheme, having withdrawn the funds in cash.
Further enquiries by the official receiver found that when the government loan ran out in November 2021, Subhan inflated his income and applied for two further loans worth £20,000 – despite being insolvent.
The Insolvency Service said he withdrew more than half the funds in cash and used £13,500 for "non-essential expenditure".
Due to the risks he posed to creditors, the official receiver sought to impose additional bankruptcy restrictions against Subhan.
He recently had his 11-year bankruptcy restrictions undertaking accepted by the Secretary of State, meaning he is limited to what credit he can access.
It also bans him from being able to act as a company director without the permission of the court.
Deputy official receiver, Karen Fox, said: "Throughout our enquiries, Mohammed Subhan failed to provide adequate evidence of what he used the loans on, whether it benefited the business or that he had any reasonable expectation of repaying the loans back.
"He posed a significant risk to creditors and 11 years of restrictions will severely curtail Mohammed Subhan’s ability to abuse his future lenders."