Subject: System Internal Loans

Effective 3/24/14


The purpose of this APL is to establish the policy by which University of Maine System Governance and University Services (UMSGUS) may provide loans to campuses to fund all or part of the costs of plant, real property, renovations/additions and operating deficits.


  1. Internal borrowing will be considered only after all other sources of funds have been reviewed and when the loan is required to meet a pressing need (e.g., cover a construction project deficit) or to take advantage of a special opportunity.
  2. The loan normally will be repaid over five years
  3. The minimum loan amount is $75,000.
  4. The interest rate will be fixed, and tied to the Treasury rate that corresponds with the loan repayment period.
  5. With the exception of loans made in anticipation of collection of pledges, payments will be due by July 1st of each year. For loans made in anticipation of pledge collections, payments will be due on the 1st day of each calendar quarter based upon the payment amounts specified in the internal loan note. The Office of Finance and Treasurer will automatically debit the payment from the account specified on the internal loan note.
  6. Requests for internal loans must be submitted by the campus Chief Financial Officer to the University of Maine System Treasurer (Treasurer). The proposed special project or large expenditure must be approved by the campus President. The Treasurer will review and approve or deny loan requests. Any loan over $250,000 must also be approved by the Board of Trustees.
  7. Each proposal to borrow must be accompanied by a debt service schedule, which shows fiscal year payments for the proposed loan and all outstanding loans, including bonded debt (Attachment I). This schedule must indicate a source of revenue that is of sufficiently low risk to reasonably assure repayment over time.
  8. After the Treasurer has approved the request, an internal loan note and a loan repayment schedule will be forwarded to the campus president and chief financial officer for signature. Upon receipt of the approved note, the Office of Finance and Treasurer will transfer the amount of the loan to the account specified on the note.
  9. Total loans issued by UMSGUS may not exceed 40% of UMSGUS’ available unrestricted net position, determined in accordance with GASB Statement No. 35.

Approved by the Treasurer of the University of Maine System. Official copy on file in the Treasurer’s office. 

Attachment I

Attachment I – Debt Services Schedule (PDF)

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