The English giants have already spent over £50 million ($85 million, 63 million euros) on England left-back Luke Shaw and Spanish midfielder Ander Herrera, and Woodward says that they are ready to spend even more.
Some of United’s European rivals have spent big recently. Real Madrid on Tuesday signed James Rodriguez from Monaco for a fee of around £63 million ($107.4m), while Barcelona paid Liverpool around £75 million ($127.8m) for Luis Suarez.
Asked if United were able to pay a similar amount for a player, Woodward said: “It is in our capabilities. The club are not afraid of doing that — spending significant amounts of money in the transfer market.”
United are rebuilding under Van Gaal after a dismal 2013-14 season and Woodward says that in the context, the club will have no qualms about sanctioning big-money signings.
“Whether it’s a record or not doesn’t really resonate with us,” he added, in comments reported by the British media on Wednesday.
“What resonates is a top, top elite player that the manager wants that is going to be a star for Manchester United. We are in a very strong financial position. We can make big signings.
“I get pointed in the direction of a target that the manager wants and there is an assessment of what that might cost and I’ll negotiate hard to do the best I can on the trade.”
United have been linked with a host of players in recent weeks, including Germany centre-back Mats Hummels, Belgium defender Thomas Vermaelen, and the Dutch trio of Daley Blind, Stefan de Vrij and Kevin Strootman.
Woodward endured a trying first close-season last year, when United missed out on a succession of major targets, and he admits he still needs to prove his worth to the club’s supporters.
“You gain credibility through experience and through time,” said the former investment banker.
“You can’t expect credibility from day one and I wouldn’t ask that of the fans. You keep learning on the job and I’ll continue to learn for a long period of time.
“I don’t mind reading (criticism), because it’s extremely important for me to listen to the fans. Criticism can change into positive comments over a period of time.”