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Daily Mirror
Daily Mirror
Sport
Jonty Colman

Burnley face financial chaos with 'significant' loan repayment if relegated

Burnley will have to pay back a significant portion of their £65m loan that the club took out when being taken over by ALK Captial in December 2020.

The Clarets, who sacked manager Sean Dyche last month, have been in a good run of form under caretaker boss Mike Jackson, with three wins and a draw from his four games in charge of the Clarets moving them from the relegation zone to 16 th and two points clear of the relegation zone with only just four matches of the campaign.

Burnley ’s upturn in form under Jackson has boosted their chances of survival, but their safety is by no means assured. If the Clarets do however get relegated, what would be their first drop down to the Championship since getting promoted from it in the 2015/16 season, it will cost them a significant outlay.

In the club’s latest accounts up until the financial year ending July 31, 2021, it states that the club’s current debt levels will be due to be repaid much sooner than if they remain in the Premier League.

The latest accounts show that the club have £102m worth of debt, with £65m of that being through Burnley FC Holdings Limited and the other £37m coming via the Burnley Football and Athletic Company.

The loan of £65m is currently attracting annual interest a rate of 8%, with the entire sum due to be repaid before December 2025. However, should the Clarets suffer relegation, they are due to pay that back much sooner.

Burnley caretaker manager Mike Jackson applauds the fans during the Premier League match between Burnley and Southampton at Turf Moor (Dave Howarth - CameraSport via Getty Images)

Will Burnley be able to steer clear of relegation this season? Have your say in the comments section below.

The recently published accounts state that relegation down to England’s second tier would lead to a “significant reduction of the loan balance.” The recent accounts showed that last year’s club reserves of £80m have dropped significantly down to just £50m in this year’s accounts.

For the 2020/21 tax year, the club recorded a pre-tax loss of £3m, with the cost of a potential relegation maybe leading to significant financial issues for the club.

In the last four games in the Premier League, the Clarets are joint-top for most points picked up. In each team’s last four games, only title-chasing rivals Liverpool and Manchester City have recorded the same number of points.

Burnley’s run of form has seen them climb up to 16 th in the table, above Leeds United on goal difference and two points clear of Everton in 18 th , who recorded a surprise 1-0 victory over Chelsea on Sunday afternoon at Goodison Park.

The Clarets’ final four games of the season in the Premier League start on Saturday at home to Aston Villa at Turf Moor, before a trip to Champions League hopefuls Tottenham Hotspur eight days later.

The penultimate game of the season comes away at Villa before Burnley host Newcastle United on the final day of the season.

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