The Ins and Outs of Loan Transfers in Football

To loan or not to loan? It is a question many Premier League clubs have been grappling with during this January transfer window and though only seven have replied in the affirmative, the fact that four of them belong to the traditional ‘Big Six’ proves that temporary transfers are by no means the preserve of those desperately scrambling to avoid relegation.

There are many reasons loans make sense to even the biggest clubs. They can be a sticking plaster for an injury crisis, help facilitate a change of direction under a new manager or simply present an opportunity that is too good to turn down.

Some clubs, of course, almost never make loan signings. Manchester City fall into that category, although they are happy to loan players out. Liverpool also refrain from doing so, although they succumb in emergency situations: Juventus’ Arthur, for example, was brought in to cover midfield injuries last summer. His subsequent record — he has played just 14 first-team minutes after suffering injuries himself — perhaps underlines why Liverpool’s recruitment are so reluctant to do such deals.

Loans can be deemed as a tacit admission that there has been a failure in recruitment planning or execution, but the stigma around them certainly seems to be disappearing, judging by the high-profile deals completed this month.

But what categories of loan exist, and how are they executed in the fraught environs of a winter transfer window?

The most desirable players aren’t usually available in January and, if they are, the price tags are often inflated to deter. But this month has proved that top talents can be available — at least in the short term — for clubs willing to move swiftly.

The latest is Arnaut Danjuma, signed by Tottenham from Villarreal, a deal very much in the opportunistic category but which was underpinned by long-term scouting. Danjuma, 25, was on a list of forward players that Spurs had been considering and Tottenham looked at doing a deal in the summer as part of Giovani Lo Celso’s loan in the other direction.

Danjuma already had one foot in the door at Everton after having a medical, but when Frank Lampard’s sacking added another layer of chaos to an already messy situation at Goodison Park, Tottenham sniffed an opportunity. Being nimble and creative in the loan market is important, too, and their preparedness to move swiftly saw him sign.

Which category that two other high-profile deals — Manchester United’s acquisition of Wout Weghorst from Burnley and Chelsea’s signing of Joao Felix from Atletico Madrid — fall into is probably best judged at the end of the season. Joao Felix will certainly hope so having been sent off 58 minutes into his Chelsea debut, a 2-1 defeat at Fulham.

Money and unsettled circumstances played a part in both deals. United’s need for a striker was exacerbated by the falling-out with Cristiano Ronaldo, a row that ultimately led to his contract being torn up.

That decision solved one problem — the increasingly destabilising presence of an unsettled player — but created another as it left United light up front. Weghorst has at least offered another option in that department, even if the public perception of replacing a Ballon d’Or winner with a striker on loan from Championship leaders Burnley may have required some at the club to swallow their pride.

Unlike the Ronaldo re-signing in 2021, however, which seemed a vanity project under Ole Gunnar Solskjaer, this was exactly what Erik ten Hag wanted and suggests joined-up rather than random thinking. Weghorst’s impact at the World Cup with the Netherlands reminded suitors of his ability, and though the process of extricating him from his previous loan at Besiktas was complicated, Ten Hag clearly deemed it worthwhile.

Either way, it represents a low-risk option financially, an important aspect for United, who had overspent previously. They had long resolved to only sign loans in January (their other arrival this month was Jack Butland from Crystal Palace as goalkeeper back-up) and with the Glazer family looking to sell up, that strategy makes sense.

Getting young players experience

The majority of Premier League clubs’ loan business is releasing their stable of youngsters into the wild. Some clubs have fully fledged loan departments that see themselves as a business within a business. Finding the right loan for emerging talent looks after both the development and asset value of a player.

It’s widely accepted within the game that under-21 football is too closeted an environment to find out whether a young player will sink or swim in the men’s game. That’s why choosing the right loan, often further down the pyramid, is seen as the best course of action. That not only helps the big clubs but provides an important function of the game in allowing smaller clubs to benefit from talent that they wouldn’t ordinarily be able to afford.

Leyton Orient, Millwall, Norwich City and Leicester City were stops on the loan journey before Harry Kane started to score goals for Tottenham, for example. Brentford have a good relationship with Wimbledon and have sent five players on loan there in the last few seasons. They’ve brought in Kevin Schade from further afield, Freiburg in Germany.

Nowadays smart clubs put together presentations on how they’ll use talented young loanees. Leeds did this when they signed Eddie Nketiah from Arsenal, which became a qualified success before his recall to the Emirates. Leeds are now looking for the right loan for a promising striker of their own in Joe Gelhardt. Clubs with big academy setups need to retain players to ensure teams are well-stocked, but the ultimate aim is to see the cream rise to the top.

At Brighton, they prefer to have players fully on board with their methods. Levi Colwill, who came in from Chelsea when Potter was still at the Amex, was a rare exception only because they weren’t able to sign him permanently and it fitted with the overall strategy once Marc Cucurella headed in the other direction for £56million.

Loans being offered as a makeweight when buying a player can act as leverage in a deal. Chelsea also know that come the summer, Colwill’s value will be far higher thanks to a successful development loan. They may be able to recoup much of what they spent on Cucurella if they decide to sell Colwill. Alternatively, he could line up at the heart of the Chelsea defence: either way, it is a win for the club.

Loans with an eye to the long-term

Wolves use loans quite frequently — as they have done this window with the arrival of Matheus Cunha from Atletico Madrid — but they are usually either loans with options in their favour or loans with obligations to buy.

This approach can also help with shaping your transfer budget for the summer, but only if you’ve done your due diligence on the player and truly see them staying beyond the end of the loan term.

Chelsea’s acquisition of Joao Felix was a little different. It was very expensive, as has become typical since the takeover led by the Todd Boehly-Clearlake consortium. The 23-year-old is costing Chelsea a loan fee of £9.7million ($11.8m) with a £5.3million salary on top. It’s not even a ‘try before you buy’, as there is no purchase option included.

Often that contractual mechanism is included at a reasonable level to keep the possibility open, or in some cases, if certain criteria are met that option becomes an obligation to buy. Neither exists in the Joao Felix deal, and with a total outlay of £15million for less than six months, he represents an extremely pricey temporary hire.

Overarching club targets can guide the thinking on such deals though. If Joao Felix can ensure Chelsea get back into the hunt for European football, perhaps even the Champions League, then it will be a win-win for all concerned. And if Joao Felix can find a happy home, with his face not currently fitting at Atletico, then the plan will have worked and negotiating a permanent deal in the summer may be the natural next step.

Newcastle’s loan signing of Matt Targett from Aston Villa last January falls into this category but felt more strategically planned. Targett gave manager Eddie Howe a much-needed option at full-back and after he impressed in the club’s climb away from relegation danger, that loan was duly converted into a £15million permanent transfer.

Howe and Newcastle’s sporting director Dan Ashworth prefer loans with a long-term prospect of a deal. But sometimes clubs have to accept other terms. Despite now having Saudi Arabia’s backing, keeping a close eye on financial fair play (FFP) means deferring spending until the summer can prove a handy tool.

In addition to Targett’s loan, Newcastle also spent £25million on Chris Wood. The price Newcastle paid was reflective of newfound riches and appeared inflated, but it also helped weaken a relegation rival in Burnley.

Having fulfilled his purpose at St James’ Park, Wood was duly made available for loan this month, an option Nottingham Forest were only too happy to take up. That deal could become permanent should certain objectives be met, and in the meantime, his salary will be off Newcastle’s books as they strive to comply with FFP regulations.

EXPLAINED: LOAN TRANSFERS IN FOOTBALL

FAQ

What is the difference between a loan and a transfer?

How many loan signings can a club have?

Can a loaned player play against his former club?

What does loan mean in football?

A loan transfer is a temporary or short-term transfer of a player from one club to another. It does not transfer ownership of a player like in the case of an outright purchase. A player loaned out is still legally contracted to his original owner – parent club.

Why do players make loan transfers?

Thus, players make loan transfers due to the situations in their private lives. Such situations could be due to family matters and personal sentiments. As such, these players move to put themselves and their families in a more comfortable position.

How does a loan transfer work?

The clubs involved in a loan transfer work together to determine how the payment of the player’s salary is structured. In some cases, the player’s parent club agrees to foot the entirety of his wages while he’s on loan at another club.

What is a football transfer?

A football transfer is the action in which a player’s registration is moved from one club team to another. As a result of this transaction, the player will start representing a new team and is no longer tied to the club he was employed by prior to the transfer.