They should be able to get the loan for 1%+LIBOR (currently 0.8 for GBP 3m LIBOR) which is common terms for institutional investors. This is as long as the loan is secured against collateral. Given that UK interest rates aren't due to go much past 2% at their peak before falling again, then it is a good medium/long term business plan.
If we get anywhere near 2% in the next 5 years then I'd be surprised if they fell again.
In theory it sounds good though.
Still not sure the club would get 1% above Libor, they're usually quite high risk, even with collateral and wealthy backers.
If we're looking to borrow the money, then the best place (interest rate wise) will still be jumping in to bed with the Local Council.