Ohio University

Internal Loan Guidelines

General

  • Issued internal loans will be re-amortized for the remainder of their useful life in accordance with the guidelines to create the internal bank and depreciation model framework.
  • Internal loans may be approved for major equipment purchases, remodeling, or new construction projects and other approved uses.
  • Internal loan paperwork is initiated through the Treasury Management Office using the Internal Loan Request Form (Excel).
  • Internal loans require approval from the Vice President for Finance and Administration, Executive Vice President and Provost, and President.
  • Internal loan minimums will be established.
  • Treasury Management maintains fully-executed request forms.

Interest Rates

  • Interest rates are variable over the life of the loan but will be fixed for each fiscal year (July 1-June 30).
  • Interest rates will be based on the blended cost of capital including administrative and operating fees.
  • Interest rates will be published annually by the fifth working day of the calendar year. Published rates will include the fixed rate for the next fiscal year plus estimated rates for the following two fiscal years (three-year rolling projections).
  • If the published interest rate changes, revised amortization schedules will be prepared and distributed for all outstanding loans no later than February 1.
  • The loan start or issuance date will typically be the first day of the month following the Capital Funding and Priorities Committee or Board of Trustee approval.
  • The loan term cannot exceed the useful life of the asset being financed or any associated tax-exempt financing period (whichever is less).
  • The term for a gift bridge loan should coincide with the gift agreement/payment schedule, not to exceed five years.
  • Departments will be charged principal and interest quarterly based on the amortization schedules. Entries will be recorded by Treasury Management.
  • Early payoff is permitted. Interest will be charged on outstanding loan balance until the loan is paid in full.
  • When a project is completed, the actual amount spent in comparison to the loan amount will be reviewed and funding adjustments will be made if necessary.

Terms

  • The loan start or issuance date will typically be the first day of the month following the Capital Funding and Priorities Committee or Board of Trustee approval.
  • The loan term cannot exceed the useful life of the asset being financed or any associated tax-exempt financing period (whichever is less).
  • The term for a gift bridge loan should coincide with the gift agreement/payment schedule, not to exceed five years.
  • Departments will be charged principal and interest quarterly based on the amortization schedules. Entries will be recorded by Treasury Management.
  • Early payoff is permitted. Interest will be charged on outstanding loan balance until the loan is paid in full.
  • When a project is completed, the actual amount spent in comparison to the loan amount will be reviewed and funding adjustments will be made if necessary.