ADMINISTRATORS have called in a £3.7million loan made to Burnley FC following the collapse of a company run by club director Brendan Flood.

But the club has reassured fans that the repayment will not affect the club’s financial plans for the future.

Administrators of Modus Ventures Limited, of which Mr Flood is a director, have said they expect the cash to be repaid by the Clarets by next Wednesday.

The loan was agreed with Modus Ventures by club bosses and was due to be repaid when Burnley were promoted to the Premier League.

The money plus interest payments became due for repayment on July 1 and since then discussions have taken place between the club and administrator KPMG.

Burnley have confirmed the money will be paid back with no impact on transfer policy or funds available to manager Owen Coyle.

KPMG was appointed in May to restructure Manchester-based Modus Ventures, which has suffered since the property market slumped in 2007.

According to the last available official records, Modus Ventures made a loss in 2006/07 of £659,540.

Modus Ventures acts as parent company to Modus group of companies comprising of 40 other firms, many of which are involved in property, including shopping centres in the North West and Yorkshire.

KPMG said approximately 100 other companies were linked to the group.

The report said: “Burnley Football Club’s solicitors have advised us that whilst an element of the debt due is disputed, it is acknowledged that substantially all of the debt is due for repayment following receipt of the funding from the Football Association Premier League arising as a result of their promotion.

“These monies are expected to be received on August 5, 2009.”

Yesterday Burnley FC refused to comment on the amount of the loan that was contested and said it was “between the two parties”.

But asked what impact repaying the money would have on the club’s finances or transfer policy, a spokesman said: “None whatsoever.”

The spokesman added: “A formal loan agreement is in place between Modus Ventures Limited and the football club.

“This was only repayable if the club gained promotion to the Premier League and the club has made financial planning for the repayment of the loan.”

It is unclear what other loans, if any, Mr Flood has made to the Clarets in the past.

The date the loan was taken out has not been revealed.

Modus Ventures was placed into administration in May.

It followed the collapse in March of three other property development companies of which Mr Flood was a director.

In May, joint administrator Brian Green said about Modus Ventures: “The group, like many companies within the property sector, has not been immune to the economic downturn and, indeed, we believe will be one of the first in a long line of commercial real estate casualties.”

A KPMG spokeswoman said she could not comment on the loan, the disputed amount or when it would be repaid.

According to Companies House, Modus Ventures employs 20 people and was registered in Clowes Street, Manchester, before collapsing.

Former Burnley MP Peter Pike, who owns shares in the club, said: “The investment by Brendan Flood was crucial to the club at the time he made it.

“The club had an extremely difficult time a few years ago and the squad could not have been strengthened in the way it was without that investment.

“The club is now in a strong position to repay the loan.”

Mr Flood was unavailable for comment.