Six clubs on track with covid loan repayments - but one is lagging behind
New figures show £2.2m of the £25.2m borrowed from ScotGov during the pandemic has been repaid.
Scottish clubs have paid back 9% of covid loans - but there is a big disparity in how fast some are repaying, new data shows.
In February and March 2021, ScotGov lent 11 clubs a total of £25.2m to keep them afloat while their ability to earn money was decimated.
Repayment began in September 2022 - so this month marks two full years of repayment.
9% of all funds borrowed has now been repaid
The loans last 20 years so all funds must be repaid by August 1, 2042.
We know from previously released ScotGov data that clubs had paid a total of £730,000 as of May 2023.
And new data I have obtained from ScotGov under FOI laws shows that clubs have now paid back a total of £2.2m, which is 9% of all money borrowed.
However, not all clubs are paying equally.
You can see that Aberdeen, Hibs, Killie, Motherwell, Rangers, Ross County and St Johnstone are on the same page, having already paid off 9% or 10%.
Then there is a second grouping of three clubs - Dundee United, Livi and St Mirren who have paid off 5%.
Then we have Hamilton, who have paid off just £20k.
Even when you account for the fact that Hamilton took out the smallest loan of any club, the percentage is still relatively low.
A simple way to look at it this:
The loan was for 20 years
two years have passed
that’s 10% of the repayment time
anything lower than 10% in repayments is ‘behind’
So if the six clubs who have so far paid 10% keep paying at the same rate they will have paid on time.
It will be slightly later for St Johnstone, though you would imagine it would be fairly easy for them to make an adjustment account for 1%.
However, the three clubs paying 5% have ground to make up.
If they keep paying at the same rate, they will be 10 years late paying - and then we turn to Hamilton.
Most of us will be dead before Accies have paid up unless they pay more
At just 2%, Accies will be paying off the loan until 2102. So - 60 years late, and 80 years in total.
However, it’s important to say a few things:
First, it’s an interest free loan so there’s no doomsday penalty for being behind on the average repayments.
ScotGov did previously say that clubs must repay “in equal instalments” but qualified this by adding it can “vary the timing and amount of repayments.”
Second, Accies are in a unfortunately unique situation.
They were in League One last season and so revenue was understandably way down - and they will now be raking in a similar income to fellow-Championship club Livi.
Third, we know things change in football. The 11 clubs are going to experience ups and downs before 2042.
Some will get European money that perhaps allow early repayments.
Others will get relegated and have to tighten the purse strings.
Accies spent seven years in the top flight before relegation and their highest finish was seventh.
If they were to return to former glories, paying off the loan will become easier.
Fourth, the whole point of the loans was to save football clubs like Hamilton so it’s unlikely ScotGov would undermine that by demand cash back at short notice.
Fifth, even if it somehow came to that, a club could just borrow elsewhere to buy time - but I highly doubt it would come to that.
And sixth, things are changing next months.
The 11 clubs are getting the chance to change from monthly to annual repayments, which should help.
Balance sheets vary wildly from month to month at football clubs but are more settled annual.
Worrying times for Hamilton
On top of that, everything has settled down by September.
Transfers are done, season-ticket money is in and league payments have arrived, so it makes more sense to do it like that.
As for Hamilton, I’m sure we’ll all be wishing them well - but serious questions remain.
I mentioned a few weeks ago that some players refused to train as they weren’t paid.
Though the club put this down to an international banking error and it hasn’t happened since.
Then we had the Fair Game UK Scottish Football Index publication earlier this week in which Accies came out rock bottom, scoring 9.5 out of 100 overall and 3.9 out of 40 for financial stability.
I wrote to them asking for a comment about that ranking and received no reply.
Two weeks to stop the club from being dissolved
And then earlier this week we learned that Accies have been given a strike-off order.
What does this mean?
It’s complicated but essentially, UK Government-run Companies House has published a document suggesting a problem with the club’s record keeping.
The club have until September 10 to show evidence to the contrary or UK Gov will take steps to dissolve the company.
That sounds pretty serious, but in the vast majority of cases, things are quickly ironed out (as they were last August when Accies got another strike-off order).
It’s basically the taxman firing a warning shot saying ‘sort your s*** out, lads’.
Anyway, I’ll keep a regular eye on clubs paying off their covid loans and will of course update you when there is something to report.
In the meantime, thank you for all your feedback in recent weeks. I’d love to hear your thoughts on this post.
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Thanks for reading and enjoy your Sunday.