Football receivables finance: a different game
6th June 2025
Receivables finance in relation to player transfer fees is a growing practice in the football industry with an increasing number of lenders and football clubs recognising its value. Football has never been richer, but this is undermined by the industry’s competitive transfer fees, irregular income streams and the inherent risk of relegation.
Receivables financing offers clubs a dynamic tool to combat these issues by providing increased liquidity on a short-term basis. For the purposes of this article, any reference to receivables finance is specifically in relation to player transfer fee funding.
What is player receivable financing and why is it important in practice?
Receivables finance is particularly suitable for transfer fees given they are typically paid by way of annual instalments. This method of financing allows the selling club to use future revenues of transfer fees as collateral to obtain immediate cash. The underlying financing can be structured in different ways, including: (i) the grant of a loan with an assignment of the underlying receivable(s); (ii) the sale and assignment of the receivable(s) by way of a traditional contract; or (iii) the sale of the receivable(s) using promissory notes to secure repayment of the debt.
Given there are two transfer windows in a season, the transfer spending of clubs is condensed into these timeframes. Any limitation to cash flow during these periods can be detrimental to a club’s future success. Receivables finance allows clubs to gain immediate access to future transfer fees without waiting for all the instalments to be advanced. It is also an alternative and more sustainable funding mechanism to traditional bank lending, allowing clubs to accumulate debt without the potentially stringent terms and overarching security which is coupled with traditional bank loans.
How is the regulatory framework changing?
The practice of receivables financing is regulated by the Premier League and English Football League with both Leagues setting specific rules and guidelines, including the requirement that any assignment of transfer fee instalments must be to a “Financial Institution“. [1] “Financial Institution” is defined as being “any entity which is incorporated in, or formed under the law of any part of the United Kingdom, and which has permission under Part 4a of the Financial Services and Markets Act 2000 to carry on the regulated activity of accepting deposits…“. [2]
In August 2024, the EFL Board elected to establish a new policy allowing for a wider interpretation of “Financial Institution“. Subject to receiving the approval of the League and The FA, clubs are permitted to assign transfer fee instalments to “a deposit taking institution bank regulated by a competent authority (i.e., equivalent to the Financial Conduct Authority and/or Prudential Conduct Authority) in either an EEA member state or an OECD country“, thereby widening its application substantially. [3]
How is the market reacting?
The receivables finance market has traditionally been saturated by a small number of alternative lenders such as Aldermore Bank, Macquarie Bank, Close Brothers and MGG Investment Group. However, due to the relaxation of the EFL’s approach to the interpretation of a “Financial Institution“, we are seeing new lenders enter the market with overseas deposit-taking banks now able to offer their services.
Football has traditionally been viewed as a risky market due to its financial volatility and instability. However, traditional UK clearing banks are also increasing their involvement as receivables finance offers a safer financing strategy as it is tied to a club’s predictable source of income.
This financing tool has typically been deployed by Premier League clubs, as opposed to those clubs in lower leagues. However, as the wealth gap between the Premier League and the Championship widens, it is becoming increasingly difficult for Championship clubs to complete with the levels of financing which Premier League clubs possess. To combat this, we are recognising an increase in the usage of receivables financing by Championship clubs as a dynamic financing approach to promote cash flow.
We are also seeing a less direct form or receivables financing emerging in a football context – squad financing. This concept has appeared in UK football from the US along with the recent influx of investment. Under this arrangement, a lender carries out a regular valuation of the playing squad of a borrower club and agrees to advance as a loan an agreed percentage of the value of that squad. The lender then takes a floating charge over the playing squad. This arrangement has the added advantage of allowing a club to borrow against the value of its current players, not just players it has sold. Obviously, this arrangement does lead to a fluctuating pool of security assets and is also very vulnerable to a club’s relegation as squad value often plummets with its most valuable players often sold. This, though, is another interesting way for football clubs to raise money against the value of their most valuable assets.
As the market and attitudes continue to evolve, we expect to see an increased number of overseas and traditional clearing banks, as well as clubs in lower leagues, buying into receivables financing. In an industry where cash remains king, receivables finance is an effective instrument to allow clubs to unlock spending potential, promote cash flow access and increase the likelihood of on-field success.
[1] 2024/25 EFL Regulations (Regulation 51.1.10) and Premier League Handbook 2024/25 (Rule U38.10 and U38.11).
[2] 2024/25 EFL Regulations (Regulation 1.1) and Premier League Handbook 2024/25 (Rule A.1.106).
[3] Guidance to Regulation 51.1 of the 2024/25 EFL Regulations.
