Internal Loan Program

Learn about the Internal Loan Program (ILP) administered within the Campus Budget Office.

• The Internal Loan Program facilitates the authorized use of unrestricted campus cash balances for internal borrowings. 
• Loans are effectively the use of UCSD’s working capital and therefore have an opportunity cost. This opportunity cost is passed on to the borrower in the form of an interest rate.
• Internal loans have been used to fund construction and renovation projects, real estate acquisitions, equipment purchases and utilities projects, as well as provide operating/working capital for departments within the campus and health system.

Process

1. Reserves and/or carryforward balances must typically be used first before a loan can be requested.
2. The Campus Treasury Office provides a draft amortization table showing the annual debt service amount and payback schedule.
3. Treasury prepares the loan approval documents for signature by the Vice Chancellor and/or Dean guaranteeing repayment.
4. Once the loan is active, debt service reports in Cognos show the timing and amounts due for principal and interest.

OFC fund 13042 – Internal Banking Clearing Fund is used to track the loan liability and is typically excluded from most financial reporting at bah.ucsd.edu.

Rates

Updated as of November 1, 2023

• Interest rates are set annually based on a methodology that considers UCOP Internal Bank lending rates.
• Rates are fixed for the life of the loan.
• Debt service is recorded semi-annually: generally November (interest) and May (interest and principal).
• Rates above do not apply to capital equipment loans.