When we talk about facility development this describes everything from building a new stadium to adding or upgrading existing facilities to a stadium, clubhouse or training area. In the most extreme examples, facility development is required because a club has lost their ground and is having to play matches on a ground rented from another club, often many miles from their home town and community.
Clubs with their own grounds and training pitches may wish to upgrade existing facilities or add something new like a stand or a 3G pitch.
Why is Facility Development
Facility Development is important for a number of reasons:
Improving the facilities offered to supporters. For example, the provision of additional seating, facilities for disabled supporters, covered areas or improved toilet facilities enhance the match day experience.
Developing the clubhouse and other spaces for nonmatch day revenue can provide additional finance streams to clubs improving their financial viability.
Installing 3G pitches, at a stadium or training area, enables wider community use and generates additional revenue.
Developing Existing Facilities
When it comes to developing existing facilities, there are a number of funding options available depending on the club’s plans. In the case of football clubs, the Football Stadia Improvement Fund provides a range of grants to improve facilities for players, officials and spectators.
Funding is also available from various sources for the installation of a 3G pitch, either in the main stadium or as a training pitch. This provides the scope to generate additional income and increases community usage. However, this funding is unlikely to meet the full cost and there is a need to ensure that surplus money can be generated to provide a “sinking fund” for pitch maintenance and replacement.
Developing club facilities for the wider use of the local community, for instance for meetings and events, has a number of benefits. It places the club at the centre of community activities, it generates additional revenue and it attracts people to the ground who would not usually attend games.
What types of financing are available?
Obtaining a loan from a social investor is potentially the quickest way of securing finance. There are a wide range of social banks; those listed provide an illustrative example of the types of loans that are typically available.
Social investment is the use of repayable finance to help an organisation achieve a social purpose.
Charitable clubs can use repayable finance to help them increase their impact on society, for example by growing their business, providing working capital for contract delivery, or buying assets. Read our guidance on social investment for more information.
The term ‘community shares’ refers to withdrawable share capital, a form of share capital unique to cooperative and community benefit society legislation. This type of share capital can only be issued by cooperative societies, community benefit societies and charitable community benefit societies.
Shares in a CBS are different to ‘normal’ shares in companies. CBS shares don’t go up in value and are unlikely to go down, and they don’t give extra voting rights to bigger investors.
Organisations and enterprises can also invest and buy shares, but they too only get one vote regardless of how much they invest. Read our guidance on community shares for more information.
Retail banks are providing more lending to the voluntary community and social enterprise sector. Often the loan will be secured against an asset of the organisation, such as a piece of land. Whilst retail banks have a wide distribution network, there are obvious challenges such as a limited understanding of the VCSE sector’s legal forms and an operating environment that makes it difficult for them to accurately assess investment risk. The security requirements for loans may not be appropriate to many third sector organisations.
There are a range of grants available for sports and community projects from charitable foundations and sports governing bodies. In many cases the funding support is aimed at projects that have a wider community value. It is therefore essential to consider how the development of facilities will enable the club to increase its impact within the local community. Check out our funding hub for details of the latest grant funding opportunities.