Although it is trite to say that modern football clubs are very much run as businesses, there is often little consideration paid to the nuts and bolts of how these businesses work. As businesses, football clubs are not immune from the challenge of poor cash flow, which is prevalent across many industries. As such, clubs need to consider how best to leverage the financial tools at their disposal to improve their cash flow in order to maximise output both on the pitch and off it. One such tool is debt finance. While debt-finance comes in many forms, such as an overdraft, receivables finance has become increasingly prevalent in English football over recent years.

Receivables finance

In very basic terms, receivables finance encompasses a number of different financing structures that involve a company (“Company”) selling receivables to a bank (usually at a discount) in exchange for immediate access to a credit facility. This allows the Company to drawdown funds long before the receivables would actually fall due, essentially functioning as an advance payment. The bank will charge the Company a fee for providing it with the credit facility. In some structures, the bank takes on responsibility for collecting the receivables when they become payable. This is called invoice factoring. Other structures may require the Company to collect the receivables on the bank’s behalf. In either case, the essential aim is to help the Company to obtain short-term finance to meet imminent expenses. In some industries, these expenses may include the cost of obtaining raw materials to fulfil the contract from which the receivables derive. It is worth reiterating that other types of debt finance are also available to football clubs.

Why would clubs need to use receivables finance?

Some context is needed to assess fully the reasons why a football club would need to access capital quickly. Most transfer fees at the top level of the game are paid in instalments. These can be spread across a number of years. Similarly, monies from television and sponsorship deals are typically payable across a number of instalments. The transfer window system in football means that clubs are often under pressure to have immediate access to the cash needed to complete deals that could make or break their season. Conversely, clubs with an eye on investing in infrastructure may need money to fund such projects.

Cherries investing for the future

When AFC Bournemouth sold Tyrone Mings and Lys Mousset over the summer, the club opted to sell future receivables relating to the two transfers to a bank. Both transfers involved the buying clubs making payments to the Cherries in July 2020 and, in the case of Mings, July 2021 as well, according to charging documents lodged with Companies House. Rather than waiting until these transfer receivables fall due at the end of this season or next season, Bournemouth reportedly opted to borrow money in advance, which is helping to fund the redevelopment of the club’s training ground, while mitigating the impact on the club’s immediate transfer business. Bournemouth’s use of factoring helps to illustrate how mid-tier Premier League clubs can use receivables finance to their advantage by providing greater liquidity at a time when the club is choosing to make a long-term investment. But how are clubs that are less-established at the top level using receivables finance?

Norwich’s promotion brings new challenges

One example is newly promoted Norwich City. The Canaries’ unexpected ascent to the Premier League likely brought with it the crystallisation of various liabilities. According to the club’s accounts for the year ended 30 June 2018, additional payments totalling more than £22 million (at a maximum) would become payable if “certain conditions in transfer and player contracts at 30 June 2018 are fulfilled”. While the accounts relate to the season prior to Norwich’s Championship title-winning campaign, it is likely that a significant proportion of that sum became payable as a result of Norwich’s promotion. Indeed, according to reports, Norwich were obliged to pay Everton an additional £1 million for Steven Naismith, despite the forward being away from the club on loan during the 2018/19 season. Contingent liabilities of this type, combined with a reported £10 million promotion-bonus pool for members of Norwich’s squad, eat away at the broadcasting revenue clubs accrue by virtue of promotion. Given that these broadcasting monies, and other payments clubs receive, are usually payable in instalments, it can be difficult for clubs like Norwich to balance the need to pay off liabilities that have crystallised with the desire to bring in new players to ensure the squad is competitive.

It is in this context that Norwich decided to assign its entitlement to future distributions of “Central Funds” for the 2019/20 season to a bank. The Central Funds are primarily comprised of the broadcasting monies payable by the Premier League to Norwich by virtue of the club being a member of the Premier League. As these funds are payable in instalments, rather than a lump sum, it is not uncommon for clubs to seek to borrow a large proportion of the total amount (which they would otherwise receive over the course of the season) in advance to fund new signings or, in Norwich’s case, to settle liabilities from earlier signings and pay for performance-related bonuses.

The Premier League rules anticipate the potential assignment of Central Funds to financial institutions. Indeed, rule D.29 sets out various conditions associated with such transactions, which include a requirement to obtain the Premier League’s consent before entering into any transactions for the assignment of Central Funds. A similar rule exists for Championship Clubs by virtue of EFL Regulation 19.1, which Laurence Bassini famously fell foul of when Watford FC tried to use the same tool without obtaining the consent of the League.  The registration of a charge at Companies House indicates that, in this case, the Premier League gave its consent to Norwich’s assignment of its entitlement to the Central Funds. According to Companies House records, that charge has now been satisfied.

It is worth noting that clubs do not have an unconditional entitlement to Central Funds. Clubs are required to comply with various conditions under the Premier League rules in order to receive payment of Central Funds and the League may make deductions from a club’s share of the Central Funds in certain circumstances. For example, if the club has failed to pay a ‘football creditor’, the League may pay the creditor directly from the club’s share of the Central Funds, with the amount to be paid to the club being reduced accordingly. This is an important point to be aware of for banks considering entering into this type of transaction with a club.


For self-funded clubs like Norwich, receivables finance can provide an effective means of addressing cash-flow issues, without living beyond the club’s means or securing borrowing against the club’s major assets like the stadium and training ground. Of course, clubs will need to weigh the benefits of receiving ready access to a credit facility against the fees applied by banks that offer this type of finance. In many cases, the attraction of quick access to finance will prevail.