Reason for Policy
To provide University schools or departments with a funding mechanism for short-term financing needs.
Policy Statement
Internal loans are utilized to fund the purchase of equipment and other short-lived assets and to cover short-term financing needs created by cash flow-timing issues for capital projects. Internal loan requests should be for financing needs in excess of $250,000.
Internal Loans are approved by the University's Budget Committee through the approval process outlined in the accompanying procedure.
This policy defines the general terms of the loan agreement, the interest rate on the loan, and the repayment method.
Terms
Up to ten years, not to exceed the useful life of the financed asset, as established by generally accepted accounting principles, and the duration of the cash flows used to repay the debt.
Rate
The interest rate will be established by the Budget Committee at the time of the potential loan approval and will be based upon a combination of considerations, including but not limited to current interest rates, the term of the loan, the University's cost of funding, and the riskiness of the project.
Repayment
Interest will accrue on a monthly basis and be assessed on the total loan amount outstanding to include principal advanced and accrued interest to date. Principal and interest payments will be structured to match up with the timing of the primary source of repayment.
Exclusions
None
Special Situations
None
Procedures
Additional Information
Frequently Asked Questions
None
Related Data
None
Contacts
Policy Contact
Subject |
Contact |
Telephone |
Fax |
E-Mail |
Internal Loans |
Treasury Operations |
919-843-7803 |
919-962-4140 |
treasury@unc.edu |
History
Revised: