Most commonly, young prospects will be loaned to a club in a lower league in order to gain invaluable first team experience.
In this instance, the parent club may continue to pay the player's wages in full or in part.
A club may take a player on loan if they are short on transfer funds but can still pay wages, or as temporary cover for injuries or suspensions.
In the Premier League, players on loan are not permitted to play against the team which holds their registration (section 7.2 of rule M.6).
The system also allowed players whose club had suspended operations to play while still being registered to the original club[15] Clubs made full use of the guest system; in the 1940–41 Championship final between Wigan and Bradford, Wigan featured guest players from Liverpool Stanley, Salford and Hull Kingston Rovers while Bradford included guests from Salford and Leeds.
Loans in ice hockey, subsequently, tend to be either formalized short-term reassignments of NHL players to either a team's minor league affiliate or a longer-term reassignment to an unaffiliated club outside of North America, most commonly to a European team.
Additionally, a player on a conditional loan is paid their NHL salary rate (rather than the lower rate paid if permanently assigned to a minor league club), the player counts towards the NHL roster limits and their team's salary cap.
[18][17][19] AHL teams are allowed to loan players down to the East Coast Hockey League (ECHL).