Arsenal have borrowed £120million from the Bank of England at what is presumed to be a tiny interest rate — and that “reflects very well” on the club.
That is according to finance expert and new Football Insider columnist Kieran Maguire, speaking exclusively after Arsenal met the qualifications announced by the Covid Corporate Financing Facility for the loan which will cover pandemic-relate revenue losses.
While the exact amount of interest Arsenal will pay is undisclosed, CCFF loans are characterised by their remarkably low rates — North London rivals Tottenham, for instance, took out a similar Bank of England loan, borrowing £175m at 0.5% interest.
By contrast, clubs like Burnley and Southampton have taken out loans at around 9% under different initiatives.
That Arsenal are borrowing at a comparatively tiny rate is indicative of good financial management, say Kieran Maguire.
“The loan Arsenal have take out is a Bank of England loan,” he told Football Insider.
“These are specific loans given to companies in the UK who have proven themselves to be significant UK companies with large numbers of employees, big international profiles and a history of good financial management.
“Those boxes are very much ticked by Arsenal, which is why the rate of interest is so very low.
“The riskier the lending, the higher the rate of interest, which reflects very well on Arsenal in this instance.”
These loans are far from exclusive to football: EasyJet, John Lewis, Burberry, Boots and British Airways have all borrowed using the CCFF scheme too.
The purpose of the loan is not for capital expenditure, however, so Arsenal fans should not expect to see any of this money invested in the transfer market.