Structuring business finance around a short sporting career
Sorbus Finance helps you understand how the deposit, term and any final payment work alongside a sporting career, so you can compare more than a monthly figure. We discuss the available options and explain the trade-offs before you commit, including what a contract ending or transfer could mean. Finance remains subject to lender criteria, and a career change does not cancel the agreement.
Broker support to help you move forward
Access to relevant lenders, help presenting your circumstances and a broker to explain the next step: that is the value Sorbus brings to your enquiry.
Personal borrowing is a separate route from company finance. Sports professionals who meet the high-net-worth criteria may enquire personally, subject to eligibility checks and lender criteria. Sporting status alone does not establish eligibility.
Start with the income period, not the asset
It is tempting to begin with the asset and work out a monthly payment afterwards. For a sporting career it is usually wiser to work the other way round. How long is income contracted for? What would the company receive if a contract was not renewed? What could it comfortably pay from fixed income alone? The answers shape the term, the deposit and whether finance makes sense at all.
Shorter terms and deposits
For otherwise comparable agreements, a shorter term normally means higher regular payments but less time in debt. A larger deposit reduces borrowing and may reduce interest, but rates, fees and other terms can differ, so compare actual total costs. Neither option is right for everyone, and neither makes uncertain future income safe to rely on.
It is also worth thinking about what the company keeps in reserve. Using every available pound as a deposit can leave nothing to cover payments during a quiet spell, an injury or a gap between contracts. A balance between deposit and reserves is often more resilient than either extreme, and your accountant can help judge what that looks like for the company.
Balloon payments
A balloon is a larger final payment due at the end of the agreement. It lowers the monthly payments during the term, which can look attractive, but the balloon still has to be paid.
- The company must be able to pay the balloon when it falls due
- Selling the asset may not raise enough to cover the balloon, as resale values are never guaranteed
- Refinancing the balloon is not guaranteed and depends on lender criteria at the time
- There is no automatic right to hand the asset back instead of paying, unless the agreement specifically says so
Early settlement
Do not assume a business agreement gives an unrestricted right to end it early. Ask whether early settlement or termination is available and how the lender calculates the cost. Remaining payments, interest, fees or other charges may apply, depending on the agreement. Obtain the terms before signing and request an actual settlement figure before acting.
The company needs funds to cover that figure and any shortfall against the asset's value. If the lender owns the asset, do not sell or transfer it without the lender's permission and agreed settlement arrangements. A transfer to a different club does not transfer ownership of the asset.
If a contract ends or a transfer happens
Finance taken by the company is a contract between the company and the lender. It is not linked to the athlete's playing contract, so if that contract ends, is terminated or the athlete is transferred, the finance continues as normal. Payments remain due on the agreed dates.
What usually happens next
A new playing contract does not necessarily pay the same company or on the same terms. Review the company's actual cash flow, not just the athlete's new headline pay. If income falls, contact the lender before payments are missed and discuss what is possible. Reserves or an authorised asset sale may help, but changes to the agreement are not guaranteed.
Personal guarantees
A personal guarantee can expose a director to liability if the company cannot pay. Moving abroad or changing club does not, by itself, release it. The extent of liability depends on the wording and circumstances; obtain independent legal advice before signing.
Questions to ask before going ahead
These are worth discussing with your accountant or financial manager alongside us.
- Could the company meet every payment if a contract was not renewed?
- Is there a balloon, and how would it realistically be paid?
- How is early settlement calculated under this agreement?
- Is a personal guarantee required, and from whom?
- Would it be better to wait, borrow less or not borrow at all?