Business and Financial Policies and Procedures
 

Internal Loan Guidelines

Loan Purpose - Internal loans may be approved for major equipment purchases, remodeling or new construction projects, and other approved uses. Internal loans are not made for working capital.

Individual Loan Amount - May not exceed $10,000,000 for any individual capital project.

Maximum Loan Term - 10 years. Interest and principal must be paid off during the term of the loan.

Interest Rates

  • Loans Less than 3 years - The interest rate for loans up to three years is set at the time of the loan, for the life of the loan (rate is not reset each year). The interest rate is based on the institutional money market fund utilized in the operating funds pool and is never less than 1%.
  • Loans More than 3 Years - University Investments annually recalculates the interest rate for loans of more than three years (each March, to become effective the following July 1). The interest rate is based on the Barclays Capital Intermediate Aggregate Bond Index yield and is never less than 3%. The interest rate for loans for more than three years is adjusted annually if the rate from the preceding year differs from the current rate by 1% or more.
  • Quarterly Interest Calculation - The quarterly interest calculation is based on the average quarterly outstanding loan balance. OBFS charges quarterly interest payments to the funding source designated in the loan agreement.

Campus and University Total Loan Amount Limitations

  • The total amount for outstanding campus internal loans (current balance plus approved, undisbursed funds) may not exceed 25% of the campus average cash balance for the prior fiscal year.
  • The total amount for outstanding University internal loans (current balance plus approved, undisbursed funds) may not exceed 15% of the average balance of the University's operating funds investment pool from the prior fiscal year.

Contact the Director of Capital Financing for the current campus and University internal loan limits.

 

Last Updated: March 17, 2011 | Approved: Senior Associate Vice President for Business and Finance - November 2010