How can golf clubs fund big projects like irrigation, machinery or refurbishments? Malcolm Pennycott of Golf Finance explains why smart borrowing can secure your club’s future.
Capital projects are among the biggest challenges golf club managers face. From irrigation systems to machinery fleets, locker rooms to water storage, the sums involved are substantial – and for many clubs, finance is the only realistic way to fund them.
Malcolm Pennycott, who leads Marketing and Business Development at Golf Finance, works with more than 400 clubs across the UK to help them understand their options.
He appeared on the latest GCMA Insights podcast, where he explained that debt should not be seen purely as a negative.
“Some golf clubs have a relationship with debt where they view it as a negative thing,” he said. “But one thing is clear: the clubs and businesses that have invested in their facilities, that have invested in their product, they are the ones that are reaping the success of that.”
While cash-rich clubs may be able to dip into reserves, most don’t have that luxury. For them, spreading the cost of large purchases or projects can make strategic sense.
“It removes that short-term strain on cash flow and operations, and allows clubs to make the necessary investments to improve the product,” Pennycott explains.
Irrigation – the elephant in the room
One of the most pressing issues is irrigation. Climate variability, drought risk and member expectations are forcing many clubs to act. Yet, as Pennycott points out, the subject is not always easy to communicate.
“It’s something that is quite difficult to explain to the members why it’s so important,” he said. “It’s the elephant in the room for a lot of golf clubs because it’s a huge investment.
“But the average age of an irrigation system in the UK is nearly 40 years old. That puts huge pressure on clubs to manage aging, inefficient systems.”
Water storage and sourcing are now part of the conversation. Rainwater harvesting, reservoirs, boreholes and grey water recycling are all becoming commonplace.
“Probably a quarter of all our inquiries now involve some form of water storage,” said Pennycott. “Some clubs in England are spending over £100,000 a year just on water usage. If you can invest in storage, the payback can be substantial.”
From locker rooms to machinery
Not all projects are as complex. Sometimes, finance can be directly offset by revenue. Pennycott gives the example of locker rooms.
“Locker rentals can make these projects cost neutral,” he said. “Within five or seven years, the project is making pure profit – and at the same time, the club has improved its product and its facilities.”
Machinery remains the most common form of finance. With costs rising sharply, many clubs are shocked at quotes for full fleet replacements. Here, finance offers certainty. As Pennycott noted: “The two main things that funders will look at are affordability and logic. Can the business afford the repayments? And is it obvious why the club wants to make this purchase?”
Presenting the case
Ultimately, financing major projects comes down to governance and communication. Clubs need a clear plan, backed up with the ability to explain to boards, members and funders why investment is necessary.
“You’re always telling a story to the underwriters and showing them why this is the next step forward for the business,” said Pennycott. “If you can do that, finance can unlock improvements that would otherwise be out of reach – and help secure the club’s future.”
Key takeaways for managers
- Debt is not always negative – if managed correctly, finance can remove strain on cash flow and enable strategic investment in facilities.
- Irrigation and water storage cannot be ignored – ageing systems and rising costs mean these projects should be part of every club’s long-term plan.
- Present a clear, logical case – funders want evidence of affordability and reasoning; boards and members need to see how investment benefits the whole club.
