Private credit lenders target English clubs with squad-backed loans

Private credit funds are exploring loans to English football clubs based on the value of their playing squads, according to a report by the Financial Times.

Discussions over “squad-value financing” are reportedly increasing among clubs and lenders, according to specialist football advisers. Some proposed structures would give lenders security over receivables from potential future player sales.

The approach extends beyond established financing arrangements backed by payments already owed for completed transfers. Under the proposed structures, lenders could not force a player sale but would have priority over a portion of the proceeds if a transfer took place.

London-based sports finance firm 23 Capital, which was wound down during the Covid-19 pandemic, has reportedly relaunched with squad-value lending as a core offering, according to people familiar with the matter said.

Tifosy and private capital manager Fasanara have developed similar financing arrangements across Europe in recent years. Loans have typically represented around a quarter of a club’s squad value, according to the report. Clubs in Spain, Portugal, Italy, France and Belgium have already used squad-value financing.

Burnley, owned by US investment firm ALK Capital, is reportedly among the few English clubs to have used loans sized partly against player valuations. Those facilities are also secured against a broader asset pool.