Golf club finance for courses, clubhouses and machinery

A golf club's income usually comes from several streams at once. Members' subscriptions are often collected around an annual renewal date, which can leave a club with plenty of cash in spring and less by the autumn. Green fees, visitor and society bookings, competitions and corporate days add income in the playing season. The clubhouse bar, catering, functions and weddings, the pro shop, buggy hire and a driving range can all make a real difference to the margin.

The costs are heavy and steady. Greenkeeping staff, a fleet of mowers and utility vehicles, fuel, fertiliser, irrigation, water, energy, business rates and clubhouse upkeep run all year, while visitor income falls away in winter and in wet spells. Machinery, buggies, bunkers, paths and irrigation all need replacing on a cycle, and clubhouses tend to need large refurbishments every so often. Good golf club finance matches each of those costs to the right kind of borrowing.

• Replacing a buggy fleet, or adding buggies to grow hire income
• Replacing greenkeeping machinery: fairway, greens and rough mowers, tractors, sprayers and aerators
• A new or upgraded irrigation system, pumps and controls
• Refurbishing the clubhouse, bar, kitchen, changing rooms or function suite
• Driving range bays, ball dispensers, ball-tracking technology and floodlights
• Indoor simulators, a studio or a short game area
• Rebuilding greens, tees and bunkers, or drainage works
• Adding padel courts or other facilities to bring in new members
• Buying the freehold, buying another course or refinancing existing borrowing
• Cash flow before subscriptions are renewed, and VAT or tax bills

How a club is set up decides which lenders can help. A proprietary club owned by a limited company borrows like any other business, usually with the directors' personal guarantees. A members' club may be an unincorporated association, a company limited by guarantee, a community benefit society or a registered community amateur sports club (CASC).

An unincorporated club has no separate legal identity, so it cannot borrow or give security in its own name; borrowing usually has to be arranged through trustees or a club company, and fewer lenders will consider it. A club registered as a CASC has rules on how it uses its income and assets, set out in HMRC's CASC guidance. Check your club's rules on borrowing, and whether members need to vote, before you apply.

Golf income is sensitive to the weather and to membership trends, so test repayments against a cautious year, not a good one. Borrowing over a long term for assets that wear out quickly can leave a club paying for machinery it has already replaced. For proprietary clubs, personal guarantees are common; our guide to personal guarantees explains what that means. Members' clubs should be clear about who carries the liability if the club cannot pay.

Before borrowing, consider whether a supplier finance offer, a members' levy or debenture, or grant funding from Sport England for community use would cover part of the cost. Capital allowances such as the Annual Investment Allowance may apply to some equipment; ask your accountant how they apply to your club.