The Trotters have used a very small squad this season and Megson understands that reinforcements must be bought in to improve.
"With the three loan players we are letting go, we are left with a squad that would get relegated," he said.
"We have to improve it. We have no choice.
"The hatchet job has been done. I was asked to get the expenses right down and keep the club in the Premier League.
"This season I have used 18 players, including Chris Basham, who went on loan to Rochdale and wasn't deemed to be good enough there.
"Now we have to look at a slightly more expensive way forward. It has to be done."