Carlisle United's chief executive has said it is "not a viable approach" for the club to make debt repayments to Purepay Retail Limited in its current financial position.

The Blues owe more than £2.3m to Purepay as a legacy of loans from Edinburgh Woollen Mill.

The amount is accruing interest while directors say they are still waiting for a response from Purepay to their suggestions over dealing with the debt.

In the meantime, Blues chief executive Nigel Clibbens has explained that to attempt to service the debt now would be a risky approach.

"Given our model with already limited cash for investment on or off the field, and a very low-cost operating model already, to achieve any meaningful new cost reductions on top, to fund debt repayments would be unrealistic without risking a severe and very fast downward spiral," Clibbens writes in his latest official update to fans.

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"In my opinion, that is a not a viable approach, while trying to compete on the pitch.

"As we have seen, cutting football spending is risky, and if you then spend what you do have poorly, it risks catastrophe.

"Relegation, income collapse and ruin all can come very fast – that doesn’t help repay the debt the next season and after."

Clibbens' comments were made in response to a supporter's question about how United can repay the Purepay debt, if there is no 'football fortune' or owner/investor cash to go towards it.

The director - who will be among five Blues bosses on a fans' forum panel tonight - said it was rare for EFL clubs to generate enough cash from their day-to-day trading to pay off debt.

He added that it was "extraordinarily rare" for a lender who is not a club owner to loan cash in the first place, due to the difficulty clubs face in repaying such amounts.

United's most recent accounts showed a debt of £2,329,699 to Purepay.

Clibbens said: "It is extraordinarily rare for EFL clubs to generate enough cash from their day-to-day trading to pay players without “football fortune” or “new owners/investment” never-mind debt.

"Almost every EFL club needs new cash each year to keep going. Owners provide it - if it’s not Football Fortune, or if Football Fortune is not enough.

"CUFC currently needs circa £500k of new cash to pay its day-to-day trading costs every year. This is to cover pre 21/22 spending levels on the playing budget (ie no increase - which is unrealistic), before cost inflation (which is actually happening) and before any new investment in the ground or team or football department (as Paul Simpson says to “rebuild the club”).

"Any debt repayments (or even interest) means a bigger “cash hole” to start with – with none of that cash going to make the club better either.

"Bridging that current cash gap is a serious challenge already; day-in, day-out, year-in, year-out.

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"This will be tougher in 22/23 and beyond, even before anything extra on top – like relating to debt."

Clibbens said the extra £500,000 United need every year is the equivalent of about 2,000 extra fans a game.

But he said to grow their income even beyond this, in order to consider repaying debt, in a climate of economic difficulty for businesses and fans, "is possible but takes time and also needs upfront investment", though winning matches can change things quickly.

"Almost every EFL club cannot borrow and get loans in the first place, except from their owners or closed connected parties who understand it’s not an investment to make a return or get back," he added.

"Even the staunchest supporter who is considering “investing” will recognise, providing new cash to pay old debt does little, if anything, to improve or help the club in future.

"In that case why do it? Better to spend cash on the future not the past – yes?

"This is very simple and is why those who provide money to clubs in the form of debt, are almost always faced with huge write-offs when they sell or exit (Courtenay, Knighton, Story) or they do a commercial deal to share “football fortune” or get repaid over a very, very long time.

"It is why lending with the expectation of repayment is very rare and fraught with problems."

Clibbens added: "EFL football clubs repaying debt is extraordinarily rare and difficult – it is why it’s extraordinarily rare for a lender who is not an owner to loan cash to clubs in the first place, as they see the issues of repayment, even with security.

"Ask MSD at Derby, trying to recover its debt even while secured on the stadium.

"That is why anyone who chooses to do so, in those circumstances, deserves full respect and credit for their generosity and support for a community asset."

Clibbens subsequently went on to give more details on the club's approach to the debt in a fresh update article.

He praised the firm, and EWM, for their support of United.

He said: "Purepay has been supportive since taking over the debt from EWM, leaving the loan in place on the same terms as before.

"It has not requested any capital repayments, or asked for interest to be paid, or asked for discussions on the repayment either. Neither had EWM before that.

"That assistance and care for the club has been brilliant in tough times for the club and then as Covid affected their own businesses.

"We remain immensely grateful for their and their financiers' ongoing support. It remains critical to, and invaluable to, the club. They have always understood the importance of that continuing support to the club, its fans and the community as a whole, and taken its responsibilities arising from that seriously.

"That superb support even now is allowing the club to focus its cash on improving the club, and to now support Paul Simpson and the team which, in turn, improves the club’s ability to the repay the debt."

Clibbens said that, while debt repayments are not currently on the cards, the situation must be brought to a head at some stage - and that this was a "priority" at the club.

"Interest continues to accrue, and an increasing commercial third-party debt that is not being serviced is not good for the club as a borrower, Purepay and its stakeholders and financiers, or the guarantors," the director said.

"That cannot go on indefinitely.

"The debt is owed by 1921 and it needs to be repaid and serviced, and that is the intention of the board and shareholders.

"The Holdings Board continues to actively seek a way forward to agree a repayment programme with Purepay, its stakeholders and financiers to repay the debt and service the interest in a way that is affordable and mutually agreeable, starting as soon as possible."

On other financial issues at the club, meanwhile, United's chief executive said: "Business costs and overheads are increasing. Stadium costs are up again due to power costs and spending on repairs and renewals. There is growing pressure on staff pay due to rising cost inflation and minimum wage requirements of our off-field staff.

"Football player spending was planned to increase 20 per cent this season after budget increases made in June last year. The final outturn is expected to be the highest for some years.

"Given the season on the pitch, this makes the value for money achieved the worst for a number of years. Agent spending has continued to rise."

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