The Horserace Betting Levy Board (HBLB) last invited racecourse applications for loans in September 2020. This was the second loan window opened in 2020 by HBLB as part of the overall approach to supporting the sport during the Covid-19 lockdown and the resumption of racing.
A summary of the application and assessment process is set out below.
Outline lending process for 2020
The Levy Board is inviting applications for loans for capital projects as well as working capital assistance.
Working capital loan applications can be from £50,000 up to a maximum of £200,000 per racecourse or up to £1m per racecourse group.
There is no upper limit on the amount that can be applied for to support a capital project. The maximum loan granted for a capital project will be 75% of the total project cost.
Applications for all loans can be made between 1 and 30 September 2020. Loans of £50,000 to £200,000 will not be required to have supporting documentation to the same extent as for higher value projects. Loan applications greater than £200,000 will require external due diligence by the Levy Board’s professional advisers. It is also the case that the Levy Board may require security against a loan for a material amount. For all loans above £200k the Levy Board will charge an arrangement fee of 1.5% of the total loan value.
On all loans the rate of interest charged on outstanding amounts will be 4% per annum. The repayment term for any loan will be four years. Annual interest is charged at the end of each year.
The maximum loan granted per project will be considered on an individual basis using the evidence included in the application and any due diligence carried out. The overall amount for loans available will be subject to affordability and may have to be limited if a large number of applications are received by the Levy Board.
Applications will be considered by the Levy Board’s Investment Committee during October and November 2020. Final decisions will be made by the Board and applicants notified. It is the intention that loans approved may be drawn down from December 2020.
Capital Credit Scheme
The Capital Credit Scheme enables racecourses to accrue all or part of their grant payments from the Levy Board which can then be drawn down by racecourses for future use to support capital projects, including meeting their loan repayments.
The principles as to which projects are eligible for Capital Credit use are the same as for racecourse loans. The agreed criteria of the Board’s priorities in assessing applications are:
a) capital improvements needed as a result of British Horseracing Authority/legal requirements;
b) non-revenue-generating loans for horse specific projects e.g. turf, drainage, stabling;
c) revenue generating projects;
d) non-horse specific projects.
All authorised users of HBLB's Racecourse System can download a Capital Credit Scheme guidance note and Capital Credit project application template on the 'Other Information' tab of the Racecourse System's dashboard.
