How Do Football Clubs Pay for Transfers? Cash Reserves, Loans and Debt Explained

Your favourite football club announces the signing of a player for £50 million. Simple, the club has £50 million, the selling club receives £50 million, and the deal is done.

In reality, it’s rarely that straightforward, and most clubs don’t have their entire transfer budget sitting in the bank waiting to be spent. 

Fans who follow their club’s business more closely may know that transfer fees are often paid in instalments, frequently spread over several years (not to be confused with amortisation.) 

This is part of the answer, but it still leaves two unanswered questions: where does the money actually come from, and how does it get from one club to another?

In this article, we look at the different ways clubs fund transfers and overall spending, from player sales and existing income to loans and debt factoring, as well as who actually carries the debt, and how this can affect a club’s transfer activity.

How much cash do clubs have, and can they use that money?

By accessing a club’s annual reports, we can see details of how much cash it holds, usually listed on the balance sheet as ‘cash or cash equivalents’ or ‘cash at bank and in hand’. These figures vary significantly between clubs.

To give a general idea of how much clubs can have in cash reserves, here are the figures for the top and bottom three Premier League clubs from the 2025/26 season:

Importantly, cash reserves are not the same as a transfer budget. With money constantly moving in and out of a football club, the figure on the balance sheet is only a snapshot of the cash held on one particular date–not an indication of how much money the club has available to spend.

Cash reserves are nevertheless important when assessing a club’s short-term financial health, particularly under the Premier League’s new Sustainability and Systemic Resilience (SSR) rules, which include a Working Capital Test which requires clubs to demonstrate that they have enough resources to meet their obligations throughout the season. This looks beyond cash alone, with other available short-term resources such as credit facilities and certain receivables also taken into account. These are explained below.

Clubs also have to account for debt repayments, existing transfer instalments, and the everyday costs of running a football club, rendering them unable to spend all of their cash reserves on transfers. 

Conversely, clubs can spend significantly more than they have in cash. West Ham, for example, spent more than £150 million during the 2025 summer window despite having just £422,000 in cash at the date of their previous accounts.

So where did the money come from?

Existing Income

Before getting into the more complex forms of financing, clubs can fund transfers through money they already generate.

The most obvious source is player sales. West Ham, for example, raised more than £120 million from sales that summer, providing the cash to help them pay future transfer instalments.

Clubs also generate income through streams such as broadcasting, sponsorships, prize money, ticketing and retail, all of which can contribute towards transfer spending and the club’s wider expenditures. Owners can inject money into the club, although how this can be used for transfers depends on the relevant financial regulations.

The key point is that clubs rarely have, or need, the full transfer fee sitting in the bank when a signing is made. They can use existing income, future revenues and player sales to meet payments as they fall due.

When these sources aren’t enough, they can turn to external financing. 

Financing transfers through debt

An increasingly common strategy in professional football, clubs are able to borrow money from investment banks, private equity funds, or other financial institutions.

Note: Just like clubs, it’s also worth remembering that lenders do not necessarily have millions sitting idle in an account waiting to be lent out. They operate within a wider financial web where money is constantly being borrowed, invested, repaid and so on.

In football, there are common ways in which a loan can be set up, and to to identify which type it is, there are two useful questions to ask:

1. How is the borrowing structured?

Term loan

This is a relatively simple type of loan that involves a loan provided for a set period of time with agreed repayment terms.

For example, West Ham agreed a £124 million term loan facility with Rights and Media Funding Limited in 2025 as part of a deal that has a five-year term. 

This means that the club can borrow up to £124 million over the five years (as of 17 December 2025, they had drawn £89 million), and must repay it within the same five years.

Revolving Credit Facility (RCF)

An RCF provides a more flexible structure, and gives a club access to a set amount which it can draw, repay and re-draw as needed.

Manchester United, for example, currently have access to a £400 million RCF. As of May 2026, £150 million had been taken out, leaving a further £250 million available. It depends on the terms of the agreement, but typically, if they were to repay £150 million, they would have the original £400 million available again. 

In general, RCF’s are used to provide clubs with working capital as and when they need it.

2. What supports the borrowing?

Often, a lender will negotiate an asset of the club that will be held as its security. This is an asset the lender may be able to take control of if the club defaults on its repayments, and there are multiple securities that could be used.

Receivables-backed financing

Receivables, also known as intangible assets, are payments a club is contractually due to receive in the future, such as transfer instalments, and these can be used as security for a borrowing facility.

For example, in 2018, Leicester City agreed a loan from Australian investment bank Macquarie which was secured against £36 million of remaining payments the club was due after selling Riyad Mahrez to Manchester City. 

The same principle can apply to other contracted income, such as certain broadcasting or commercial payments.

Secured Loan Facilities

Clubs can also secure borrowing against tangible assets such as stadiums, training grounds or other property. Simply, should the club not pay its debts, its stadium could change hands.

Further, a loan is sometimes backed by a combination of both. West Ham’s £124 million term loan is an example: its borrowing was secured against all of the club’s assets, potentially covering both tangible and intangible assets.

Cash-Flow Lending

A final, more traditional type of loan is cash-flow lending. This is based on a club’s expected ability to generate enough money in the future to repay the debt, where, rather than relying on a particular asset as security, the lender assesses the club’s future predicted revenues.

Who takes on the debt?

Ultimately, the above categories can overlap.

For example, a club can have a term loan secured against its tangible assets, or an RCF backed by receivables. The first question describes how the borrowing works, and the second describes what supports it.

But who actually carries the debt? Generally, this depends on where the borrowing is placed within the ownership structure.

Debt Loaded onto the Club

The simplest arrangement is where the football club itself is the borrower.

West Ham provides one example, while Manchester United is another. When the Glazer family acquired the Manchester club in 2005 through a leveraged buy-out (LBO), the acquisition was completed with debt placed on the club. As a result, the club’s own revenues are ultimately used to repay that debt.

Any other loan where the above assets (stadiums, future transfer fees, etc.) are used as collateral fall into this category.

Owners Carrying the Debt

Alternatively, borrowing can be done through a parent or holding company which sits above the club.

Chelsea provide a recent example. Following Clearlake Capital’s £2.5 billion takeover of the club, a further £1.75 billion was raised to support further investment into its infrastructure and squad, including a combination of term loans and RCFs.

However, the borrowing was not secured against Chelsea or its assets. Instead, it was secured against shares in companies within the ownership structure.

This means that, if the owners were to default, the lender’s security would be over shares in companies that own the club rather than directly over the club itself.

Initially, these outcomes may seem similar, but where the debt sits can have significant implications for the club’s operations and how it’s treated under financial regulations.

How Debt Impacts the Club

As discussed in our previous coverage of the Premier League’s financial rules, PSR is to be replaced from the 2026/27 season by the new Squad Cost Ratio (SCR) and SSR rules, which focus on a club’s spending relative to its revenues and overall financial health as opposed to the ‘allowable losses’ of the previous system.

This makes the distinction between club debt and owner/holding company debt important. When borrowing is conducted by the owner or a holding company instead of the club itself, the debt is not with the club, leaving it in a more favourable financial position when it comes to the new spending rules.

Under SSR, the Positive Equity Test also considers a club’s debt-to-asset ratio when assessing its financial health. Debt held outside the club can therefore help it meet its requirements and avoid sanctions.

Having the debt held above the club also means the club’s revenues can be reinvested into football operations rather than being used to pay debt held by the parent company.

Final Points: Debt Factoring and FIFA’s TMS

When reading into your club’s finances, you may come across the terms ‘restructuring’ or ‘refinancing’. Broadly, these involve changing the terms or structure of existing debt, and often include taking out new loans to repay older ones.

Outside of borrowing, it’s also worth noting one final method of raising funds: debt factoring. 

Unlike a loan, debt factoring involves a club selling its rights to future income in exchange for immediate cash. This approach has been popularised by FC Barcelona, who sold 10% of its LaLiga TV rights for the next 25 years to US investment firm Sixth Street in exchange for €267 million.

Once the finances are in place, any transfer fees are eventually processed through FIFA’s Transfer Matching System (TMS), which provides a standardised process for registering international transfers and their financial details.

So, while a £50 million transfer may look like a simple exchange between two clubs, the finances behind it can be far more complex, where cash reserves, player sales, future income, debt facilities and owner funding can all play a part in getting the deal over the line.

Article by Zakaria Anani