EXCLUSIVE: EFL offer desperate clubs ‘last resort’ loans from a £50m pot if they are on the brink of going bust, with some struggling to pay October’s wages
- EFL has written to members offering a loan if they are at risk of going bust
- Loans are not a long-term solution but are to keep clubs out of administration
- Up to 15 clubs in EFL are believed to be at risk of financial crisis due to Covid-19
- Government ban on fans in grounds has cut income and pushed clubs to brink
Football clubs in the Championship and lower leagues have been offered emergency loans from the EFL in a desperate bid to ‘stop them going bust’, after failure to agree a rescue package with the Premier League or Government.
Sportsmail has learned that the EFL has written to all its members to give them the opportunity to apply for a loan from the £50million pot.
It comes after the EFL clubs turned down an offer of £50m from the Premier League a week ago, which included £20m in grant funding, to help clubs that have been pushed to the brink by the Covid-19 pandemic.
Premier League offered to bail out EFL clubs but the £50m offer was rejected a week ago
‘There is £50 million available in loans to clubs from the EFL and I’m sure some clubs will be taking it up,’ a club official told Sportsmail after receiving notification of the loan facility.
‘It is an emergency loan for those clubs that need money now to keep going. To claim the money the club has to show it is on the edge and facing administration. It is a last resort loan for clubs in need of cash.’
Up to 15 clubs are believed to be at risk of financial collapse in the EFL, with a number unable to meet their payroll payments for October.
The EFL and clubs have repeatedly warned there is a danger teams will go bust without immediate financial help because the government’s ban on fans in stadiums has reduced their matchday income to zero.
EFL chief Rick Parry said the Premier League’s rescue package fell short of what was needed
It was hoped that assistance would come through a rescue package from the Premier League, which has been under discussion for months, but so far it has not materialised.
The loans will not remove the need for further financial help from the Premier League.
The short-term injection of cash will be reclaimed by the EFL from the annual payment it is due to make next season.
‘If you take the loan now it will be repaid by withholding some of that payment,’ the club official told Sportsmail.
Fans cannot attend stadiums amid the pandemic, cutting match-day income to almost zero
Chief Executive of the Premier League Richard Masters agreed an EFL rescue package
‘You are just kicking the can down the road. The clubs that take it are still relying on a grant, but this is basically to stop them going bust.’
The Premier League’s £50m funding proposal was turned down by the EFL in a series of divisional calls on October 15. The consensus was that the offer – which only promised grants and interest-free loans for those in Leagues One and Two – should be rejected.
The EFL declined to comment on the latest development, but said in a statement last week: ‘The League has been very clear in its discussions of the financial requirements needed to address lost gate receipts in 2019/20 and 2020/21.
‘And while EFL Clubs are appreciative that a formal proposal has now been put forward, the conditional offer of £50million falls some way short of this.’
Culture Secretary Oliver Dowden is under pressure to allow clubs to let fans into grounds
Sportsmail understands that talks about a rescue package are ongoing and the EFL does not see this emergency loan facility as a solution to the ongoing financial crisis among its members.
In the days prior to the £50m offer to EFL clubs, details emerged of Project Big Picture, which was masterminded by officials at Manchester United, Liverpool and EFL chief, Rick Parry.
The plan proposed a £250m Covid-rescue package and an overhaul of the league’s funding.
The controversial move, which was widely seen as a ‘power grab’ by the richest clubs that would ruin English football, was supported by EFL teams desperate for cash.
Ultimately it was rejected by Premier League teams at a shareholders’ meeting.
Meanwhile, Cuture Secretary Oliver Dowden is under increasing pressure to allow football fans back into stadiums, which will generate some match-day income for clubs.
A petition, #LetFansIn, has gathered 100,000 signantures and will now be discussed at a debate in Westminster on November 9.
Related Post
