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EQUIPMENT LOAN PROGRAM
A.  Description of the Program.University of Maryland System will issue debt from time to time to fund a revolving equipment loan pool. Monies on deposit in the pool will be used to make equipment loans to our Institutions. These loans will be repaid and those repaid funds will be made available for future equipment loans to our Institutions. Initially, the fund will be issued as variable rate debt with the interest rate to be adjusted periodically.B. Use of Proceeds.1.Loans will be made to acquire tangible or intangible personal property which, under generally accepted accounting principles, is eligible to be capitalized as plant, property or equipment of the System.2."Private Use" certifications will be required for each loan. If "private use" is contemplated a special request must be made.3.If a loan of $500,000 or greater is expected to be drawn for either a single piece of equipment or multiple pieces of equipment for a single project, the institution is required to contact USMO for approval.4.If an Institution pays a vendor directly and seeks reimbursement a Declaration of Intent to Reimburse form must be submitted.C. Procedure for Advances.1.Each Institution must comply with COMAR and other USM and State regulations and rules governing equipment acquisitions.2.When an equipment loan request is made the following documents are required:a.Signed Revolving Equipment Loan Agreement Formb.Original Invoices (each Institution must maintain its own copies as the originals will be delivered to the Trustee and USMO will not keep copies).c.Private Use form.d.If reimbursement is being requested a Declaration of Intent to Reimburse form is required.3.Requisitions must be received by UMSA on or before the 20th of the month.D. Loan Repayments.1.A repayment schedule will be generated using the fixed rate of 5.5% in order to provide level debt service payments and to fund the Budget Stabilization Fund.2.Most loans have a term of five years and can be paid off at any time without a penalty. Debt service is due in January and July of each year. 3.All debt service payments will be charged against an FAS or RSTARS account number which is provided by each Institution.4.Interest paid in excess of the actual interest rate of the equipment loan fund will be returned to the borrowing institution once the loan has been paid in full. If monies in the Budget Stabilization are not sufficient to cover the interest expense the USMO may adjust the interest rate and recalculate the repayment schedule. | ||||