RFL to act as lenders of last resort as conditions of government loan revealed to clubs

The RFL have revealed the terms and conditions behind the £16 million government loan that clubs are now able to apply for.

Clubs received details of the conditions late on Sunday evening which detailed interest and repayment details, as well as whether clubs will be eligible to access part of the funding.

However, clubs will only be able to receive funding if they have exhausted all other avenues of financial support. A detailed document sent to clubs explained that only after clubs could prove they had done all they could to find support from other sources, including government schemes and bank loans, would they be eligible.

In effect, the RFL are acting as the lenders of last resort. They will provide financial aid for clubs if they have done all they can but still face collapse.

Clubs who do receive a loan will have to pay it back, however, sources have told TotalRL that the interest rate is incredibly competitive while repayments are over an extensive period of time, which will undoubtedly help clubs during the crisis.

The loan repayments will be taken monthly from distribution money given by the RFL. In essence, it is an advancement on distribution money serving as a low-interest rate and will be used as cash flow assistance for clubs in need.

Despite all of that, it’s believed that few clubs will apply for a loan in the short-term. The vast majority of clubs currently find themselves in a safe financial spot, with furlough money and Sky’s broadcast money continuing to keep them on a sound footing.

However, clubs are more likely to ask for assistance once furlough ends, with clubs uncertain how badly their revenue streams will be affected once the sport returns. For Super League clubs, taking staff off furlough while playing behind closed doors will mean they take a financial hit and although the Championship and League 1 seasons are at threat of being null and void, that could result in refunds to season ticket holders and sponsors, which could potentially cause cash flow issues moving forward.