West Brom take out bank loan so they can do January business
Albion have taken out a bank overdraft so they can do more business in the January transfer window.
The Baggies have borrowed money from Barclays to prepare themselves for the rest of the month.
Chief executive Mark Jenkins has borrowed against next season’s parachute payment from the Premier League, and has guaranteed the club will repay the loan once they receive that money.
Albion are only planning to do modest business this month, having already brought in Mason Holgate on loan from Everton.
Another loan signing is most likely, although the Baggies have not ruled out a permanent transfer if the right one is available.
It’s believed the loan is a significant one, but manageable, and will be paid back later this year.
The club is currently due to go overdrawn in February, even if they do not sign any more players this month.
But Jenkins has taken out this loan in order to give Darren Moore an opportunity to strengthen his squad this month.
Finances at football clubs usually reach a low point in April because the largest injection of cash normally takes place in June, thanks to a combination of season ticket sales and television money
As the season wears on, player wages will drain the Baggies of their resources.
Albion received £41.5m in parachute payments this season, but their wage bill is still £38m.
Should they fail to win promotion this season, they will be given £34m from the Premier League next season, and then £15m the year after.
The Baggies sold Nacer Chadli to Monaco for £10m towards the end of the summer transfer window, but they have only received one instalment of £3.3m from the French league club so far.
The majority of clubs in the Championship are in debt, but many of them borrow from their owners rather than banks.
However, apart from buying Yuning Zhang for £6m, Albion’s Chinese owner Guochuan Lai has maintained the club remain self-sustaining.
That was confirmed by Jenkins in his end-of-year message to supporters in the match-day programme: “The club’s owner Guochuan Lai wants us to continue to operate Albion in the manner he set out at the beginning of his tenure.
“He seeks a well-run and self-sustaining club geared to returning to the Premier League as quickly as possible.”