With UK banks not lending, sports have to be creative on their financial developments. New research from the University of Cambridge proposes that there is a lot of money that is yet to be utilized from supporters.

One scholar who studies alternative finance at Cambridge Judge Business School reported that it would be challenging for sports franchise to access traditional bank loans. A reason as to why banks will not offer a loan to a sports team is because they believe that there is a reputational risk. How does this play along? They say that when you lend to a club and things go wrong, then there will be a problem with the team’s fan base.

A way to raise funds that is becoming popular is crowd funding through the internet and in mini bonds. These are bonds for retail and cannot be resold and are on offer in minimal amounts to the direct clients.

One unique bond of its kind is the £25 million mini bond that was launched by the Jockey Club in 2013. This bond was used in the financing of a new stand at the Cheltenham race course. This is the first bond of its kind to be seen in the British sports world.

Research on this bond revealed that almost all the holders of the bond were fans of Horse racing and that their average age was over 60 years. One amusing thing is that they were diverting their idle money from building societies’ accounts. They got their attraction from the 4.75% interest rate and an additional 3% that was give back through loyalty points which would be offered back on tickets, drinks and food at the racecourses.

One thing that’s important about this Jockey Club is that they have managed to alter the psychological relationship they have with their fans. They have new experiences and they are now in need of more.

Paul Fisher who is the managing director to the Jockey Club Racecourses mentioned in a statement that the loyalty scheme has been a success; even though the interest rates earned from borrowing in the banks might have fallen. With this, it seems that the club would still use mini bonds to develop more courses in the future.

Another club that has followed in the Jockey Club’s footsteps is the Lancashire County Cricket Club that used similar tactics last November to earn themselves 3 million from a mini bond that earned the investors 5% interest rates and 2% on loyalty points. Wasps Rugby Club also sold out a £35 million retail bond after few days of introduction.

This is one interesting way for the clubs to raise money for their development. This shows that you could not only bet on your favourite clubs but you have the chance to invest in the clubs and earn guaranteed money in terms of interest rates and loyalty points bonuses.