Cash-strapped Arsenal take £ 120million loan from Bank of England amid financial constraints from coronavirus pandemic
The Gunners must pay back the money with interest by May as they continue to feel the monetary pinch from the Covid-19 epidemic
Arsenal has taken out a £ 120million ($ 160million) loan from the Bank of England to help ease cash flow problems caused by the coronavirus pandemic.
The loan was granted by the bank’s covid business finance facility (CCCF) and is due to be repaid by May, with an unspecified amount of interest.
Arsenal’s north London rivals Tottenham took advantage of the scheme last summer, borrowing £ 175million ($ 240million), while the Football Association also used it to borrow the same amount in December.
In a statement, Arsenal said: ‘We are taking a short term loan of £ 120million through this facility to partially help manage the impacts of lost income from the pandemic.
“This is a similar approach to that taken by a wide variety of major organizations across many industries, including sports, and is reimbursable in May 2021.
“The CCFF is designed to provide short-term finance at commercial rates during the pandemic to companies with good investment ratings and making a significant contribution to the UK economy.
“The CCFF is in addition to the loan from our owners Kroenke Sports and Entertainment which allowed us to refinance the debt of Emirates Stadium last August.”
Arsenal have seen their income plummet due to the pandemic and the club’s cash reserves are now depleted, with match-day income – which typically accounts for 24% of the club’s annual income – now non-existent due to games played behind closed doors .
Last year, the Arsenal Supporters Trust released a detailed analysis of the club’s financial situation before the pandemic and predicted a loss of £ 144million ($ 195million) if the entire 2020-21 campaign was staged without fans.
The £ 120million loan which has now been secured by the Bank of England loan will be used to ease the club’s current cash flow problems and not in the transfer market.
Arsenal are still hoping to add at least one new player to Mikel Arteta’s squad this month, but any new addition is likely to come only on loan due to the financial difficulties the club are currently facing.
Arsenal’s goal during the transfer window is to move the players forward and reduce the payroll, with the club in talks with higher-income earner Mesut Ozil and his agent about a potential exit in January.