Capability-linked lending

A bank manager looking at a community football club sees little of what they are used to seeing. There is no audited balance sheet. There is no collateral, as the clubhouse usually sits on municipal land. There is no trading history in any form that a credit committee recognises. There is a treasurer who is a volunteer. And typically, a legacy spreadsheet holding years of on-time payments together.

What the bank manager cannot see is that the club has been operating for 40 years, has over 250 members who pay their subscriptions, runs four revenue lines, replaces its committee on a fixed cycle and has never missed a payment to anyone. All of that is true . . . but none of it is legible.

As a result, the loan does not happen. Not because the risk is unacceptable. But because nobody can price it. The club joins a queue for a grant instead . . . and waits . . .

Built on a decade of conviction

In 2017, Stuart Kay and Gordon Noble set out on a mission to solve the roadblocks that were preventing finance to flow at scale to sports infrastructure under a uniformed system. This resulted in the publication of Investing in Community Futures in 2018. The book's diagnosis drew in part on Australia's Productivity Commission, which found that not-for-profit organisations struggled to access capital because of two binding constraints: no collateral to secure a loan against and no organisational structure that would enable them to raise equity. The Commission's recommendation was not more grants. Instead, it was to build a functioning market for not-for-profit debt.

Investing in Community Futures set out to develop exactly that market. Its core position was that capital and community projects both exist in quantity, but that what fails is the structure between them. Institutional investors need scale, low due-diligence cost and something repeatable. Community assets arrive one at a time and require bespoke assessment that costs more than the loan is worth. It proposed aggregation and credit enhancement as the bridging mechanism. Post-publication, the government of the state of Victoria in Australia tested the thesis of Investing in Community Futures with a community sports infrastructure loan scheme, putting AUD 5 million of interest support behind a target of AUD 100 million in lending. Public support did not fund clubs directly . . . it de-risked lending to them, demonstrating the mechanism worked.

Europe's own institutions have since confirmed the underlying fragility, if not yet the fix. The Council of Europe's 2025 white paper on the sustainability of sports facilities found that ownership of sports facilities across the continent sits mostly with cash-strapped local authorities, that the facilities themselves are ageing and increasingly energy-inefficient and that when councils have to avoid rising costs, closure is often the fastest and easiest option. The broken funding model Investing in Community Futures described in 2018 — clubs being dependent on public money that can be withdrawn at will — is exactly what leaves sports facilities exposed the moment budgets tighten.

Capability as a proxy for creditworthiness

What Investing in Community Futures did not look to fully solve, and what nobody has solved since, is the piece that makes aggregation possible in the first place: a common measure of what a club is capable of. You cannot pool assets you cannot compare . . . and you cannot compare organisations you cannot measure. Capability-linked lending is the principle that makes that measure financially useful.

The claim underneath the principle is straightforward: how well an organisation is run tells you something real about whether it will repay a loan. This is not a leap of faith. Research on grassroots sporting clubs by Cordery and Baskerville found that clubs with more revenue sources have more stable revenue and that organisations dependent on few sources are measurably more financially vulnerable. Revenue diversification is an operational characteristic. It is also a credit signal. The same logic runs through governance continuity, membership retention, committee turnover, supplier relationships and facility arrangements.

A family of loan principles

Anyone in sustainable finance will recognise the shape of the principle. Capability-linked lending is deliberately aligned with the loan principles that already govern this space.

The distinction that matters is in the right-hand column. A sustainability-linked loan rewards a borrower who already has access to capital. A capability-linked loan creates access for a borrower who has none . . . unlocking previously constrained capital. The linked metrics are also doing different work: a sustainability KPI sits outside the creditworthiness assessment, while a capability indicator is a proxy for creditworthiness itself.

Introducing a shared language

FLO Spinfra was established to develop the first standard that operationalises the principle of capability-linked lending for community sport: FLO Fitness™. It assesses and rates a sports club against 25 capability indicators across five categories — Governance, People, Community, Environment and Supply Chain — drawn from federation standards and operational best practice. The result is the FLO Fitness™ Rating: Bronze, Silver or Gold.

Every indicator is meant to resolve a single credit-relevant question. The output is a repayment capacity signal — not a financial audit and not a sustainability score. That distinction is the whole design.

The FLO Fitness™ Rating is what a club earns. The FLO Finance™ Tier is what that Rating unlocks . . . and the instrument is the capability-linked loan. FLO Fitness™ and FLO Finance™ are two sides of the same medal: capability on one side and capital on the other.

Importantly, we help the borrower improve and move up across the Bronze, Silver and Gold FLO Fitness™ Rating tiers. Clubs do not just get assessed and rated. Our AI coach, FLOra, works with each club on the specific gaps its assessment reveals, providing a bespoke program for capability improvements based on how the club operates.

The FLO Spinfra ecosystem enables clubs to “level up” and unlock better finance, better terms and better (environmental, social and economic) outcomes.

Empowering sport to do more

We built FLO Spinfra because sports clubs are the heartbeat of our communities and because, across the globe, they do not have sufficient access to the finance they need. As a result, some will likely cease to exist. That is the outcome we are working to counter.

It should be noted that capability-linked lending is not a substitute for public funding. Nor is it intended as one. The argument in Investing in Community Futures is that community organisations are best served by public, private and community capital working together — each doing the part it is best suited to serve. For example, grants and public investment remain an important pathway for major sports facility (upgrade) projects. What blended finance structures make possible is a wider role for private credit alongside them. As such, a capability-linked loan is an additional, new instrument to help bridge the structural finance gap . . . not act as a replacement for the others.

The FLO Spinfra mission is simple: enable the flow of finance to sports clubs so they can survive and thrive. As core parts of the FLO Spinfra ecosystem, both FLO Fitness™ and FLO Finance™ function independently to serve our mission:

• Every club assessed under FLO Fitness™ becomes more operationally capable and credible — whether or not it takes a loan. Governance, operations and financial management capabilities are highlighted through the assessment itself. FLOra coaches the club on the areas for improvement.
• Every club financed under FLO Finance™ is set up to do more, not just get by — more coaching, better equipment, greater capacity. More participation means more health, wellbeing and social value delivered.
• Combined, FLO Fitness™ and FLO Finance™ compound the positive impact sports clubs deliver to their communities.