What Does On Loan Mean In Soccer? Learn How It Can Help Your Team!

Table of Contents

Soccer is all about passion for the team you support. As someone who loves watching the sport, I’m always on the lookout for things that might bring my team more success.

Getting players on loan is one such thing that can help your favorite team get a better player.

In July 2023, New York City FC announced they had made a loan agreement with the Philadelphia Union for Andres Perea.

In exchange for the young midfielder, Philadelphia would receive $300,000 in GAM (General Allocation Money) for the following season.  

This marked one of the few moments where MLS teams had taken advantage of the intra-league loan system, since its inception about a decade ago.

Given this reluctance to indulge ( compared to other leagues, such as the English Premier League), you may wonder, “What does “on loan” mean in soccer?”

What Does On Loan Mean In Soccer? 

When a player is “on loan”, it means they have been temporarily transferred from their club to another. 

Loans are quite common in soccer, and in MLS in general, but they don’t get enough media attention as there are no major financial commitments involved. 

For example,  Ivan Angulo, who played a crucial part in Orlando City’s title run for the US Open Cup in 2022, was actually loaned from the Brazilian Serie A.

Why Do Teams Loan Their Players? 

Clubs can benefit from loans in many ways, whether they are sending a player out on loan, or accommodating one from elsewhere.  

  1. If a club is not able to give a player the valuable game time they need, they may allow them to move to a different club on a short-term basis to gain some experience. The club can then determine whether the player is ready to get into the squad depending on how they perform while on loan. 
  2. Sometimes, a team may incur a series of injuries that ultimately cause gaps in the squad. To fill these gaps and mitigate the consequences, the club may need to get players on loan from outside. Clubs can also make a loan deal to strengthen a particularly weak area of the field, such as a vulnerable left wing. 
  3. If the team is in a bad position on the table, struggling for a qualification, or fighting for a trophy, they can bring in players on a temporary basis to help boost their chances.  The good thing about loans in soccer is that they do not come with a huge financial commitment.  So even if the team fails in its objective, they won’t have spent a fortune on the transfer.  
  4. When a club is looking to sign a new player, sometimes they may make a loan deal to assess their ability before signing anything permanent.  

Does MLS Have Loans?

Player loans within the MLS have existed since March 2013, but they are rarer than loans between MLS and other leagues. This is because when MLS was launched in 1996, there was a trade mechanism in place that made loans unnecessary.  

Things have changed since then, especially with the expansion of rosters and the rapid growth of the Academy system, but many MLS teams are still reluctant to loan out their top prospects. Only a few intra-league loans have taken place since the loan system was introduced.

Two popular examples include Tony Cascio, who was loaned from The Colorado Rapids to the Houston Dynamo, and Eriq Zavaleta, who went “on loan” from the Seattle Sounders to Chivas USA in 2014. 

But as the sport continues to grow in popularity in the USA, dormant players may get the opportunity to play in other MLS clubs on loan, especially as more fans gather to see home-grown American talent.

Some of the rules that MLS teams have to abide by regarding intra-league loans are:

1. Each club can only loan up to 2 players within the MLS per season 

2. Only players who are 24 years old or younger can be loaned out 

3. A player “on loan” cannot compete against his parent club during the duration of the loan.

MLS clubs are also allowed to loan players from their Supplemental or Senior Rosters to an outside league, subject to the discretion of the League.

While the player is “on loan”, the club is eligible for roster relief. The loan agreement will determine whether the parent club will receive Salary budget relief. 

If the club recalls the player before the loan period ends, that player cannot participate in League Season games unless there is an available slot in the roster for them.

Additionally, if the loanee is an international player, they should be replaced by another international player who has a spot in the International roster.  

What Are The Financial Ramifications Of A Loan Player?

Certain financial aspects are involved when acquiring players “on loan”. For starters, clubs do not have to pay a substantial one-time fee for loaned players (unlike permanent transfers).

MLS clubs want to avoid these significant acquisition fees, as they could raise the total cost of the player to the level of Designated Player (DP), or Targeted Allocated Money (TAM). 

Secondly, parent clubs are known to contribute to the wages of the loaned player, so you can have a player on your roster without paying 100 percent of their salary.

This would allow you to optimize your club’s total wage bill without sacrificing real assets. 

Thirdly, loan deals often come with purchase options. In MLS, in particular, the parent club has the ability to decide not to bring back a player if they are not performing well.

As a result, this would open up the cap space required to find their replacement in the upcoming season.

Given the strict rules around salary caps in the MLS, having a bad player on an expensive long-term contract can really take a toll on your overall budget strategy.

Not only will it have a direct financial impact on the club, but it could also compromise the strength of the squad.

How Do Players React To Being “On Loan”?

When asked about his experience as a loanee, Philadelphia Union forward Freddy Adu expressed that going “on loan” as a young, inexperienced player is not that easy.

The team you are going to has a lot of expectations – they are looking for you to come in and make a difference.

When you get there, and they see that you are not as prepared as you should be or that you may need some time to work your way into the team, they start to panic a little. 

Then, they push you aside for a while, and sometimes, when this happens, you may find yourself stuck on the side. 

According to the U.S. International Jozy Altidore, sometimes a player may be brought “on loan” simply because the club president thinks he is a good face for the club, but not because of their abilities.  So, the manager may not really have any plans for you. 

Ideally, it is always a good idea to speak to the important decision-makers in the club before making a move. Get input from everyone to increase your chances of a successful loan. 


In soccer, being “on loan” is like living in a weird type of netherworld. You play for one team, yet you belong to another.

The team you have a contract with may not need you anymore, and you can’t be too sure about the one you have been loaned to. The pressure is enough to make or break a career. 

Yet, this process has been done so often,  that it has become a common thing in football. Why? 

The answer is playing time. A loan provides an opportunity for players to add to their experience. 

You may be stuck on the bench for one reason or another, whether the guys ahead of you are playing exceptionally well, or you are struggling with your fitness.

Either way, a loan can provide the game time you need to develop as a player and subsequently improve your market value.

Leave a Reply

Your email address will not be published. Required fields are marked *