Arsenal, a top football team in England, recently applied for a short-term loan valued at about £120 million, in closing the gap of incurred revenue losses caused by the ravaging COVID-19 pandemic.
What you should know
Arsenal met the requirement set by the Bank of England to qualify for the United kingdom government’s COVID-19 Corporate Financing Facility, created in providing short-tenor loans at fair rates to businesses that contribute remarkably to the British economy.
- The short term loan was taken by Arsenal in maintaining the club’s positive cash flow, so as to be able to pay its footballers and other staff members their wages.
- Arsenal, like many other leading football clubs in Europe, has witnessed large revenue losses because of the restriction of human mobility, in order to curb COVID-19.
Arsenal issued a statement as regards the short term loan, giving more details on why it decided to go through that route;
“As we continue to work through the implications of the global pandemic on our finances, we can confirm today that the club has met the criteria set by the Bank of England for the Covid-19 Corporate Financing Facility (CCFF).
“As a result, we are taking a short-term £120 million loans through this facility to partially assist in managing the impacts of the revenue losses attributable to the pandemic. This is a similar approach to that taken by a wide variety of major organizations across many industries, including sport and is repayable in May 2021.
“The CCFF is designed to provide short-term finance at commercial rates during the pandemic to companies that have strong investment ratings and which make significant contributions to the British economy.
It’s important to note that Arsenal’s city rival, Tottenham Hotspur borrowed £175 million from the Bank of England, in 2020 in order to cover losses caused by the COVID-19 virus onslaught