Finance through image-rights companies and personal service companies

This guide explains how lenders tend to view different company structures. It does not say which structure is right, and it does not discuss tax treatment. Speak to your accountant or tax adviser about the right structure for you.

An image-rights company may receive income under agreements for commercial use of an athlete's name, image or other rights. What it owns or can license depends on the agreements, not its company name. For a lender, the questions include who pays the company, under which agreement, for how long and whether payments are reaching its bank account.

An agreement that runs for several years with fixed payments is easier to rely on than a series of short, one-off arrangements. Lenders may ask for confirmation of the agreement's value and term, though we will never ask anyone to send signed contracts through a website form.

Some athletes, particularly in individual sports, invoice for their services through a personal service company. A golfer, a boxer or a driver might be paid fees, prize money or retainers this way. Lenders will look at invoicing history, the reliability of the clients paying the company and how much income is left after costs.

Because this kind of income can rise and fall sharply between seasons, lenders often average it over a longer period or rely mainly on retainers and other fixed amounts. A quiet year, an injury or a change of team can have a large effect, and a cautious lender will allow for that.

Other athletes run a broader trading company, perhaps combining coaching, media work, events or a separate business interest. These are assessed much like any other small company, with the usual focus on accounts, cash flow and existing commitments.

A trading company with several modest income streams can sometimes be easier to assess than one relying on a single large agreement, because the loss of one source does not stop all income. Lenders will still want to see how each stream is evidenced and whether it is likely to continue once the playing career winds down.

Whatever the structure, a few principles apply across the board, and understanding them avoids confusion later.

Finance through a company should be for something the company genuinely uses. Lenders will ask what the asset is for and may decline if the purpose does not fit the business. This is not a route to fund personal purchases, and we will not present a case that way. Questions about how an asset is treated for tax or benefit purposes are for your accountant.

Our role is to understand the company, explain it accurately to lenders whose criteria suit it, and set out the terms offered so the directors and their advisers can decide. We work alongside the accountant and agent rather than replacing them, and we are happy to speak to them directly with the client's permission.

If the company is newly formed, read our guide for overseas players and new signings, which covers how lenders view companies without filed accounts. If the structure is still being decided, it is usually better to settle it with your advisers first and look at finance afterwards.