West Bromwich Albion agree four-year £20m loan with investment group MSD Holdings

The £20m loan West Brom have taken out has been secured against "all group assets"

Championship promotion hopefuls West Bromwich Albion have agreed a £20m loan from US investment group MSD Holdings.

The money, taken out over four years with the group's UK holding company, will be used to finance the club's "general business operations".

Albion are currently 14th in the Championship, but only three points outside the play-off places.

This season is their last one covered by parachute payments after relegation from the Premier League in 2020-21.

As Albion went down the season after winning promotion to the top flight in 2019-20, the payments, worth tens of millions of pounds, are made for two years, rather than three.

The news of the deal comes days after the club assured fans that a £4.95m loan to chairman Guochuan Lai will be repaid by the end of the year.

The money, originally due to be repaid in September along with £50,000 interest, was lent to Lai to help another of his companies through the Covid crisis.

With Baggies group director Xu Ke announcing the MSD loan will "only be spent on the purposes of the football club", attention will inevitably shift to how much new head coach Carlos Corberan will have to strengthen his squad next month for their promotion push.

The Spaniard told the media last week he was "happy" with his squad and would "see if we can strengthen" in January.

MSD Holdings - a familiar name to football fans

West Brom are the latest club to borrow money from the US investment group who have dealings with a number of Premiership and Championship sides.

These have included Southampton, Burnley and Derby County, who went into administration in September 2021 and were relegated to League One, owing MSD £15m.

The Baggies' deal is with the financing group's UK holding company, registered in Cardiff.

Loan taken 'to avoid fire sale of players'

Analysis - BBC Radio WM's West Brom reporter Rob Gurney

This is clearly worrying news for Albion fans, with The Hawthorns and the Baggies' training ground among those "group assets" being used to secure the loan.

The club's next set of accounts will show them still to be in the black, but Premier League parachute payments run out at the end of this season; hence the need for this £20m injection.

I understand it's been made to avoid a fire sale of players, and while I'm led to believe promotion this season isn't an absolute must, it's clear Albion have to return to the top table sooner rather than later.

As I write, controlling shareholder and chairman Guochuan Lai is yet to repay the £5m loan he took out of the club during the coronavirus pandemic to prop up another of his businesses.

He has already missed one deadline, and the next one is this Saturday.

How a club that has spent 13 seasons in the Premier League has got into this position is a very pertinent question to ask.