Union Saint Gilloise raises €2.5 million from fans to pay tax bill

Brussels football club Union Saint-Gilloise (USG) raised €2.5 million on a participative financing platform to pay its corporation tax, in a move described by the club's management as a "flexible financing solution".

The platform USG used, called Look&Fin, is for crowdlending. This is different from crowdfunding in that donations will be repaid with interest if all goes to plan.

“[The platforms] organise the financing of what we call project sponsors, generally companies, who borrow through these platforms from investors who may be private individuals, professionals or even institutional investors,” Frédéric Lévy Morelle, chief executive of Look&Fin, told RTBF.

“It's really a way of disintermediating traditional financing, so instead of borrowing from their bank, borrowers borrow directly from investors and savers, who can invest their savings not in a traditional account or in a traditional investment, but directly in the companies of their choice for very specific projects.”

USG’s campaign is one of the largest crowdlending campaigns ever organised in Europe, Lévy Morelle said, adding that it took just over an hour to raise the funds and was an unusual one for the company, which normally deals in real estate and with much smaller sums.

“It's much more significant than what we're used to financing,” Lévy Morelle said. “To give you a point of comparison, on average, we usually structure financing of around €600,000 per project owner.”

The terms for USG investors were a three-month loan with an interest rate of 6% gross per annum, with the investment to be paid back at the end of September 2024.

But while the interest rate is more lucrative than most savings accounts, crowdlending is considered a risky investment and football clubs are no strangers to money woes.

Standard Liège football club is facing further sanctions from the Licensing Committee for its failure to pay players’ salaries for May, including bonuses and holiday pay.

“Standard informed its players last week that salaries would be paid late,” the club’s management said.

“The salaries of non-sporting staff have been paid, and this has always been done within the first 10 days of the following month. As far as May is concerned, everything should be back in order in the coming days.

"The club is determined to have the transfer ban lifted in the next few days and hopes to finalise the arrival of its first recruit in the process.”

The transfer ban was implemented for failing to comply with the conditions imposed by the licensing authority, and could be extended.

According to insiders, the financial issues are spurring athletes to consider playing elsewhere.

“Standard is in dire straits and Europe's footballing world knows it,” one player’s agent told RTBF.

Although the Liège club received a financial boost from the United States, management preferred to use it to honour outstanding debts in what critics say was an effort to keep creditors from filing for bankruptcy.