The majority of Championship clubs will take advantage of the new £117.5m loan scheme set up by the EFL and funded by the Premier League, Sportsmail can reveal.
The second-tier teams have been hard hit by coronavirus, which has prevented fans attending games at most clubs for more than a year, because matchday income is a significant part of their revenues.
And while there has been some financial relief for sides in League One and Two, Championship clubs have had not support until now.
More than 14 clubs of the 24 clubs have taken advantage of the scheme, announced by the EFL on Monday, and they are keen for the money to start flowing as soon as possible.
QPR have described their relief at finally receiving some financial assistance in the pandemic
The loans, up to a maximum of £8.3m per club, will enable them to pay their PAYE tax bills, which are set to fall due soon.
‘We have been under such cash flow pressure it’s been ridiculous,’ said Lee Hoos, chief executive at Queen’s Park Rangers.
‘It is a relief [to have the loan scheme agreed]. The only thing we have seen an increase in is streaming, but it is nowhere near enough.’
Hoos said that while costs have reduced during lockdown, each game the club stages incurs a further loss.
QPR estimate they have lost around £5.5m in gate revenues, however, total losses will be much greater because sponsorship and sales have also disappeared. Meanwhile, the tax bill has been rising.
QPR chief executive Lee Hoos told Sportsmail that the loans will take some pressure off
On average a Championship match makes £47,000 in gross revenue through streaming.
‘Players’ salaries are our biggest expense and PAYE tax payments are second,’ added Hoos. ‘We will access the loan as soon as possible and we hope it will come fairly quickly.’
Owners throughout the league have been keeping clubs going, ‘but there is only so much in the tank that they can spare and that’s the same at every club,’ said Hoos.
The EFL struck a deal with the Premier League in December to provide support to lower league clubs, after months of criticism that it was taking too long to provide help.
QPR were one of the clubs allowed up to 2,000 fans to attend a handful of games last year
The support to the Championship was due to be in the form of a £200 million loan facility to pay looming tax debts and that has taken until now to finalise.
The top flight agreed to pay £15m to cover the costs of the loan, so cash could be provided interest-free to clubs.
Initially, the EFL turned to the government and requested access to the Covid Corporate Financing Facility scheme.
Arsenal received a £120m loan and Tottenham Hotspur £175m through the scheme and the Football Association also obtained support. However, the EFL was unsuccessful, due to restrictions imposed on the lending.
But the league has teamed up with the US institution, MetLife.
Arsenal was one of the clubs to benefit from the government’s Covid loan facility
The loans are capped at £8.33m per club and the money has to be repaid by June 2024 from Premier League solidarity payments or top flight or EFL funding.
The finalisation of the loan scheme may well be a relief to clubs and the government.
Tax debts have mounted as clubs have gone longer without income and at the same time many have offered extensive support to their local communities during the pandemic.
HMRC has given businesses, including football clubs, breathing space. However, if it had stepped in to force payment of the tax debts it could have pushed clubs to the brink, said Kieran Maguire, lecturer and finance expert at the University of Liverpool.
‘Do HMRC want to be that ruthless?’ he said. ‘From a PR perspective it would be disastrous.
QPR have seen some revenue through streaming matches but it is far less than gate receipts
‘Clubs have played on without funds for the past year. HMRC have to play this very carefully.
‘This reduces the risk. It allows clubs to ensure they have complied with the law.
In December, it was agreed clubs in League One and Two would receive immediate support from a £30million grant to be paid from the Premier League.
In addition, a further £20m ‘monitored grant’ was available to clubs based on need, with a joint EFL and Premier League panel to determine eligibility.