How Much Debt Before The Administrators Step In?

Basically, I have overspent quite a lot over the last few seasons, not putting the club in trouble because I'm getting some sort of return on the money spent, but the club recently took out a £62million loan over 20 years, which will work out in total to pay pack over £81million. We also have two £20mil loans, but we were still paying the wages, and looked good for Champions League football, surely it doesn't make sense to pay an extra £20 million out, so my question is,

Was the club in danger of going into administration if loans hadn't been taken out?

Have you been into administration before?

I would appreciate it if someone could explain why the club felt it was necessary to take out these massive loans.

Check your finance screen to see your balance, if it seems low and you get a monthly message indicating you are losing heaps each month then that is why.

The thing is, that's what confused me, we were losing about a million a month, relatively quite small, end of the season comes and then we get windfalls and hopefully Champions League football, just seems odd to take out such a huge loan.

I can't speak from direct experience, but it is my understanding that the amount of debt doesn't really matter as far as entering administration is concerned, it's your ability to pay back that debt. In the finance screen you should be able to see how much money your club has on hand and how much each of your loans requires you to pay back each month. As long as you have enough cash on hand to make your monthly payments you should be able to keep the administrators off your back.

I always thought that it was linked to club value?

Possibly linked to things like division and reputation as well.

Its quite unrealistic in the fact that even if you have already got a massive bank loan and you get into more debt, the board simply take out another big bank loan.

I saw clubs simply "restructure" their debt while already having other bank loans.

In real life, no bank will loan so much money to a club who is already in huge debt to them.

I think its certainly linked to reputation and club worth. Recently I tested by going to Rangers and racking up huge debts to almost 100 million. There was no difference as I could still buy players and offer wages as per my wage budget at the start of the season. Then shortly after a few weeks, the board restructured their finance by taking out a 62 million pound loan.

Quite unrealistic here....

Also if administration occurs when you cannot pay off your monthly loans (like Deadly Walrus says) then that does not make sense either becasue even if you don't have the cash, the balance will simply just go into the red.