The German is being linked with Galatasary this week.
But Arteta says, "Can we afford? The ideal scenario is no.
"If it happens, we will have to invent something. We are already playing with full-backs that are not full-backs.
"They are wingers or central midfielders and could we afford to lose full-backs? No, but we don't have any full-backs."
Arteta, who has previous experience of working alongside the 27-year-old following Mustafi's short stint at Everton, is ready to offer him a clean slate.
"I know his history at this football club, but it is up to him," the Spaniard said.
"I told everybody from day one: 'It is up to you guys. You show me how much you want it, you show me you are committed here, you are going to have a chance and it is going to come this week, next week or the following one'.
"They are all going to have the chance to play. After it is up to them to show it."