Yesterday's Bahrain Grand Prix showed that Renault has some way to go before it will be competing for podium places and it is hardly surprising given the setbacks which dented the team last year. However, as Pitpass' business editor Chris Sylt reveals in the Independent, the team has received a welcome boost from the Renault car company which part owns it.

On 5 February 2010 Renault gave an £18m loan to the team and this will go some way to plugging the gap created by the slew of sponsors which departed after its former boss Flavio Briatore was ejected in September last year on being accused of rigging the 2008 Singapore GP.

According to F1's industry monitor Formula Money, the team received £65m of sponsorship in 2009 but this has more than halved this year to an estimated £32m. The biggest loss came with the departure of Dutch bank ING which pulled out in September, before the end of its contract, and was paying an estimated £43m annually. In total, the team has lost seven sponsors and gained three with the most significant of these new deals being watch company TW Steel which is believed to be paying £3m.

The team's breakdowns last year culminated with an undisclosed stake in it being sold to Luxembourg-based Genii Capital which is chaired by Gerard Lopez, one of the early investors in Skype. Why would Renault loan money to a team it no longer wholly-owns you may ask. Well, there is good method behind what may seem to be madness.

The Renault car company made a net loss of £2.8bn last year so its coffers are hardly overflowing. However, its loan to the team is well protected as it is secured on all its assets and land in Oxfordshire and this had a net book value of £35.2m at the end of 2008. Crucially, if it fails to repay the loan, Renault will get back full ownership of the team. Renault could then either retain the team, which would be a wise move if it ends up performing well on track (though this is unlikely to happen since on-track success would most probably translate to financial success meaning that the loan could be repaid) or it could sell the assets and pull out of F1 entirely.

According to Formula Money, Renault has cut its F1 costs by £65m through the sale. Its investment now stands at around £40m with the bulk of this being spent on building the 2.4 litre V8 engines used in the F1 cars.

The loan is far easier for the car manufacturer to justify than giving money to the team in return for its brand appearing on the car. The simple reason for this is that under a loan agreement the lender can expect to get its money back whereas money spent on advertising/promotion gives a non-tangible return.

Unsurprisingly, given the current economic climate, more and more team owners are justifying an involvement with F1 by wanting back hard cash rather than branding exposure. As Pitpass recently reported even Indian billionaire Vijay Mallya has given the vast majority of his support to Force India in the form of a loan rather than sponsorship. Time will tell whether the lenders get their money back.