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NBA Athletes
Contract-Based Financing for NBA Players
Contract-based financing is a specialized type of financing that allows a borrower to secure funds using a contract as the basis for a loan. For NBA players, this is often very beneficial as contract-based financing is not dependent on the borrower having a high personal credit-score, income history, or even collateral such as a house. The amount a NBA player can borrow using an NBA loan is determined by the type of contract, size of the contract, and the number of years remaining on the contract. With an NBA player contract in-place, a player can access a percentage of the remaining guaranteed dollars on their NBA player contract.
What Can a NBA Player Use a Contract Loan for?
NBA contract advances are excellent options for players who need funds for various purposes such as:
What is the Process to Applying for an NBA Contract Loan?
Applying for a NBA Contract Advance is a simple and straightforward process. The first step is to submit a loan request which you can do on our Request Financing page. Once the request has been submitted, potential borrowers will go through the process outlined below:
Pre-Qualification
Upon receiving a loan request, the Sure Sports credit team will review the athlete’s contract and request, to determine eligibility. If an athlete’s contract qualifies him/her for a loan, then terms are provided within 1-2 business days.
Proposed Terms Issued
After accepting the loan terms and submitting a signed term sheet along with a credit and background authorization form, Sure Sports will conduct a credit check on the borrower within 1-2 business days.
Client Signs the Term Sheet
After accepting the loan terms and submitting a signed term sheet along with a credit and background authorization form, Sure Sports will conduct a credit check on the borrower within 1-2 business days.
Application Process
The required documents for loan application will be requested within 1-2 business days after receiving the signed term sheet.
Underwriting
The length of the underwriting process is determined by the complexity of the loan and can be as little as 3-5 business days and up to two weeks in some cases.
Credit Decision
At the conclusion of the underwriting process, your loan will either be approved with final terms, declined, or receive a request for additional information.
Loan Documents Drafted
Once final approval has been provided, loan documents are drafted which may take 1-2 business days.
Closing & Funding
The timeline from receiving a full file to closing/funding ranges from 1 week for private-line loans to 2-4 weeks for bank-line loans.
Contract-Based Financing Repayment Terms for NBA Players
Unlike traditional loan options, contract financing provides NBA players with flexibility when it comes to loan repayment. The repayment of a contract advance will be coterminous with the player’s NBA contract, meaning the amount of time a NBA player has to repay the loan will match the amount of time left of the player’s NBA contract.
Unlike other professional sports leagues, most NBA players are paid their salary year-round. Even so, players often have obligations that may make standard loan repayment schedules difficult to manage their cash flow. Working with a company like Sure Sports will provides NBA players with added flexibility through customized loan repayment schedules to ensure they have the cash flow they desire.
Benefits of Contract-Based Financing With Sure Sports
Most traditional banks are reluctant to provide an unsecured contract-based loan to NBA players, leaving these players with few options but to take out high-interest rate loans from private lending companies or sell a percentage of their future earnings to meet current obligations.
Working with Sure Sports, NBA players have access to the speed and ease of working with private lenders where funds are often available in as little as 48 hours following approval. In addition, thanks to Sure Sports relationships with bank partners across the country, NBA players are also able to qualify for unsecured contract-based loans with traditional banks. This access is unique, and due in part to Sure Sports’ deep understanding of the sports and banking industries, as well as relationships in these industries that span decades. The flexibility to provide both private and bank loans to NBA players truly sets Sure Sports apart from other companies in this space.
When a NBA player is looking for capital, regardless of the use of funds, discretion is extremely important. Confidentiality is at the forefront of every Sure Sports loan request. In addition, a NBA Player or their advisors will work exclusively with Sure Sports from the initial request until the loan is paid off. This ensures a seamless experience for NBA players and their advisors throughout the entire process.
What about Future NBA Players Preparing for the NBA Draft?
While a player who has yet to be drafted and sign a contract with an NBA team is not eligible for Contract-based financing, they may be eligible for a pre-draft loan with a specialty finance company such as Sure Sports. Pre-draft loans are available to players who project to be drafted into the NBA in the upcoming draft and have officially declared for the NBA Draft.
An NBA Pre-draft loan is available to help future NBA players train for the combine, travel, and prepare for their upcoming career. NBA Pre-Draft loans are structured as short-term bridge loans which do not require monthly payments, rather the loan will have one balloon payment which is due shortly after the player is drafted into the NBA. At that point, the player has the ability to pay the loan off in-full, or can work with Sure Sports to restructure the loan as a contract-based loan. When moving to a contract-based loan, the player will then have the ability to make monthly payments, paying the loan off over the term of their playing contract.
NBA Player Contract-Based Financing
Case Study
Sure Sports received a request to provide a top NCAA basketball player who had declared for the NBA Draft with a Pre-Draft loan to provide funds for the purchase of a home.
The player was a non-U.S. citizen, 19-year-old male college freshman with little-to-no credit history, no assets, and zero income.
Based on the player’s rankings on select draft boards and mock drafts, Sure Sports was able to very closely project where the player’s draft position.
Using that information, Sure Sports provided the player with a $1.5M Pre-Draft loan, which was based on a percentage of his projected Rookie Contract/draft position.
RESULT
The player was able to successfully purchase the home, prior to being drafted and earning his first paycheck.
As with all Sure Sports Pre-Draft loans, there were no payments due until the player received paychecks from his Rookie Contract.
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