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EFL ‘seeking access’ to Bank of England’s COVID support facility

The English Football League (EFL) is reportedly in negotiations over a loan of around £75m (€84.8m/$102.8m) from the Bank of England’s Covid Corporate Financing Facility (CCFF) as it continues to assess means to aid clubs badly impacted by the loss of matchday revenue.

The Financial Times, citing people with knowledge of the matter, said it is unclear whether the EFL, which operates the Championship, League One and League Two, has received approval to borrow the funds, adding that it has also had interest from private lenders such as US institution MetLife.

If it does secure the funding, the EFL would be the latest football organisation to dip into the CCFF, which is designed to provide low-cost borrowing to “larger” firms with strong credit ratings to help them overcome issues caused by COVID-19.

Earlier this month, Arsenal became the second Premier League club to take out a loan through the CCFF, as it continues to deal with the global pandemic’s impact on its finances. Arsenal said it had met the criteria set by the Bank of England for the CCFF and would take out a short-term £120m loan through this facility to partially assist in managing the impact of the revenue losses attributable to the pandemic. The loan will be repayable in May 2021.

In June, London rival Tottenham Hotspur secured a £175m loan from the Bank of England after conceding that COVID-19 may lead to it registering a revenue loss of more than £200m for the period ending June 2021. The Football Association (FA) has also used the CCFF meaning that a total of £470m has been borrowed by football organisations to date.

The Premier League and the EFL last month reached a final agreement on a rescue package and distress fund to address the immediate financial challenges faced by lower league clubs as a result of the pandemic.

A fund of £50m in the form of a grant and monitored grant payments was agreed for League One and Two clubs while the Premier League will provide a further financial commitment to assist the EFL in securing a £200m loan facility that Championship clubs will be able to utilise interest free.

The League One and League Two relief package will see £30m paid to all 48 clubs as a grant and a further £20m available on application as a ‘monitored grant’. The £30m grant for will be paid immediately from the Premier League to EFL clubs for distribution based on lost gate receipts in respect of the 2019-20 and 2020-21 seasons.

Each club will receive a minimum payment of £375,000 in League One and £250,000 in League Two. The remaining £15m is to be distributed using a lost gate revenue share calculation, which will be approved by both the EFL and the Premier League.

The Monitored Grant will be provided with clubs able to apply for it based on ‘need’, with a joint EFL and Premier League panel to determine eligibility. For those in the Championship, the Premier League has agreed to provide a payment commitment of up to £15m to cover interest, arrangement fees and professional fees to allow the EFL to secure a £200m loan facility that it will then on-lend to clubs interest free.

The UK Government in November confirmed a £300m cash injection for “major spectator sports” in England, but elite men’s football and cricket was excluded.