Why Do Football Players Go On Loan?

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As a child, I remember finding out about loan deals for football players through a football manager computer game. I couldn’t understand why I had started the 97/98 season with a great young player who disappeared once the last game was played.

But if I hadn’t played that game I would probably never have found out about it.

If you are a football fan who is a little embarrassed to admit that you don’t quite understand how player loans work then don’t worry, you’re not alone (or should that be a-loan?), and this article will bring you up to speed.

The first thing to know, is that the official name for a loan is a temporary transfer, although hardly anyone uses this term, so lets stick with loan for this article.

What is a Loan in Football?

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Footballers play for clubs on contract.

So in a similar way that a self employed brick layer might sign on to a construction job for 6 months, a footballer will sign their services to a football club for a fixed term, usually a year or more. The big difference of course it that brick layers don’t need agents to manage their contracts and earn in a year what even unknown players earn in a week.

So in effect a club ‘owns’ the services of the player until the end of that contract, or until that contract is terminated for whatever reason. The player must do as the club asks of them (within the terms of the contract of course, they can’t force players to run around in their underwear or anything) and the club must continue to pay that player the pre-agreed amount each week.

A loan is an agreement which allows a player to play for another club while still under contract at that current club, hence the term ‘temporary transfer’. They are not allowed to play against the club that ‘owns’ them (in the Premier League anyway) but other than that they are effectively at the disposal of the club they have been loaned to.

A club can make it known that a player is available for loan and approach clubs they think might be interested, but equally, a club that is interested in loaning a player can approach the club that the player is contracted to and ask if they would be open to a loan deal.

Sometimes the club taking the player on will agree to pay some or all of their wages, sometimes the deal is simply a mutually beneficial one with no money exchanging hands, it just depends on the reason behind the loan in the first place.

There is no age limit on who goes out on loan, and neither is there a limit on how many times a player can go out on loan – some players have spent most of their careers on loan to other clubs.

The Rules on Loaning Football Players

In the Premier League, there have always been some rules in place to keep control of the loan situation, as it could get out of hand if left unattended as you will read later.

These rules include:

  • Premier League clubs can only have 2 players on loan at the same time.
  • A maximum of 4 loans can be registered per season, and clubs cannot loan two players from the same club at the same time.
  • Premier League clubs cannot loan a player to another Premier League club if that payer was bought in the same transfer window.
  • Premier League clubs cannot loan more than one of its goalkeepers to another Premier League club.

So there were some restrictions there to stop things getting silly in terms of bringing players into clubs, but in terms of how many players could be sent out by each club it was still the wild west.

For example, in 2020 Chelsea (who are known for their ‘loan army’) had 28 players on loan at other clubs.

However, new rules were brought in for the 21/22 season, so now clubs can only loan out 6 players per season of 22 years of age or older, although younger players are unlimited. This goes some way to keeping the practice of loaning to what it was originally intended for; to bring along young players who need first team experience.

Reasons Footballers Go Out On Loan

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The idea of loaning a footballer to another club is a brilliant one, because it often creates an ‘everybody wins’ scenario and those are hard to come by in football. Even if loans are agreed in regrettable circumstances, they still solve a problem.

The reasons behind a player going out on loan are numerous, but essentially, it usually boils down to the player not being ready or not wanting to play at the club they are currently contracted to, but equally not wanting or not being allowed to leave permanently.

On other occasions it may be simply a financial move by a struggling club, but that isn’t usually the only reason.

Here are some of the most common reasons a player might go out on loan.

To Gain First Team Experience

Football TackleThis is very common practice, especially with younger players who are contracted to big teams like Manchester United who have their own youth academies.

Big teams will search for promising players from a very young age, then train them up until they are ready to play for the youth teams, then the reserves, and eventually until they are old/good enough to break into the first team.

The problem for young players at big clubs though, is that the first team squad is usually exceptionally hard to break into, so a catch 22 situation exists where they need first team experience in order to develop further, but they are not yet ready for first team action at their club.

The answer is to loan them out to smaller clubs where they will find it easier to secure first team football, and be able to improve to the point where they can be filtered into the first team at the club they are contracted to.

For this reason, you often see young players from Premier League clubs loaned to League 1 or Championship clubs, for example, where their skills will be very welcome indeed, and they can get plenty of experience in front of a paying crowd.

Some big clubs even have (or have had) agreements with clubs in other countries, where a number of young players will go out on loan each season, so the receiving club knows they are getting a steady flow of fresh talent each season, and the bigger club has a structure in place to develop their young starlets.

Whatever the agreement, the player’s own club will keep track of their performance and development while they are away, and eventually when the loan is up they will return to their club and perhaps start playing for the first team.

There isn’t room for everyone though, and often young players end up making their loan deals permanent, or request a transfer elsewhere because they have enjoyed playing first team football, so they sign contracts with smaller clubs in order to be a regular first team player.

Coming Back from Injury

Footballer Returning from InjuryA player who has been on the side lines due to injury will have lost fitness as they recover.

As they get close to full fitness again, they may be loaned out for a short time so that they can play competitively and get 100% match fit before returning to a more competitive league.

It’s simply a case of them not being ready to compete at the level they were at prior to their injury, and to help them get back to their best they need to play competitively and not just in training.

Again, for the club they go on loan to it is a dream come true, because they might get a player they would never have been able to attract in normal circumstances, and not only that, but they don’t have to pay a transfer fee.

It might only be for a short time, but as you will understand, a small team getting a big name player even if it was only for a few games would be very welcome indeed for that club.

Apart from a stronger squad, they could also see a spike in ticket sales if it is someone big enough.


Angry FootballerSometimes relationships break down beyond repair, and when this happens it can be torture to turn up to work each day at a club that doesn’t want you, to train for a manager you can’t stand.

No one enjoys these situations, but sometimes personalities clash, and the only thing to do is part ways and chalk it up to experience.

Players are sometimes loaned to other clubs because they are desperately unhappy at the club they are contracted to.

It might be that they are not being played and think they should be, or they have personal problems with someone on the team or on the staff, and for whatever reason they can’t be sold. Maybe the transfer window is closed or the club would rather ride out their contract for financial reasons.

In these situations, where a player isn’t going to be used and their presence sours the atmosphere, allowing them to go and play elsewhere can make things much easier for everyone.

The player can go and play happily somewhere else where perhaps they will be a better fit, then at the end of the contract they can be released to find a new permanent home, or maybe get bid for if they are playing impressively while out on loan.

Financial Reasons

Football Business MoneyA club in trouble with the bank might look to cut expenditure by loaning out players to another team who will agree to pay their wages for the duration of the loan.

The club on the other end get a player essentially for free, since they are not actually buying them, and the club the player is contracted to sees their weekly wage bill shrink a little.

A club might also have the cash flow to pay a player’s wages but not the lump sum to actually buy a player, so in this situation a loan would an ideal short term solution.

Sometimes a loan fee is paid, it just depends on the two clubs involved and the situation.

More worryingly, the practice of signing players deliberately to loan them out, watch them rise in value, then sell them on at a profit has become more common.

Although a team can only have 25 players in their official squad, they can employ as many as they like and either leave them watching from the side lines or loan them out. For teams with lots of money, this provides an opportunity to profit.

Super clubs like Man City and Juventus are most likely to be guilty of this, and in fact Juventus loaned out 51 players in 2016, in 58 different deals, so some of them went out twice. This pales in comparison to Parma Calcio in 2013 though, who as well as their first team squad had a staggering 184 registered players out on loan!

Man City’s purchase of Aaron Mooy in 2016 is a good example here in the UK. They got him for nothing from Melbourne FC, confident he would play well in the UK. They then immediately loaned him to Huddersfield where he became a first team fixture and impressed. The next season, Huddersfield bought him for £10 million, which was pure profit for City who never had any intention of playing him anyway.

So signing, loaning, then re-selling players almost like a trade on the stock exchange is a way big clubs make money. This was never the intention of the loaning system though, and although the new rules introduced by Fifa will limit it, there doesn;t seem to be a way to stop it completely.

Is Loaning Footballers a Good Thing or a Bad Thing?

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Ultimately it is probably a good thing, because it gives grass roots players a chance to rise through the ranks and stops them hitting a development block early on in their careers.

It can also really help out smaller clubs who either don’t have the manpower or the finances to compete effectively in the league they are in.

The fact that the loan system is being exploited by already incredibly wealthy clubs comes as no surprise, the rich always find ways to get richer in every walk of life, but it needs to be addressed, because otherwise a small number of teams will eventually monopolise the game, even more than they already do.

Even if the rules around temporary transfers became more restrictive, clubs could find other ways to exploit the system without breaking the rules.

For example, Man City have a deal to send players that are not in the squad to Spanish side, Girona FC. And guess what? Man City are part owners of Girona, thanks to a deal made by a football agent named Pere Guardiola. And guess what? He is the brother of long time Man City manager, Pep Guardiola. Well fancy that.

There are also so called ‘farm clubs’, that are part of the same franchise as bigger clubs and seemingly exist mainly to supply talent to big clubs on the cheap. Red Bull have something of a footballing franchise, owning RB Salzburg, RB Leipzig, and the New York Red Bulls among others. Players in these clubs are inter-traded without breaking any rules, in whichever way makes the most money for the franchise.

Still, it’s better that loaning is an option than not.