University financing programs currently exist to finance both long-term projects (e.g. the ILP) and short-term projects (e.g. the FAST program). Some fully funded projects that do not need permanent financing could benefit from a temporary loan program. The Bridge program addresses the timing gap between project expenditures and the receipt of gift funds to accelerate project construction.
Program Eligibility: To be eligible for the Bridge Program a project must be approved or delegated by the Board of Regents with all funding sources identified. Use of the program requires Board approval (direct or delegated). Additionally, donor funds must be collected within five years of Board approval.
Use of Program Proceeds: Proceeds of this program may only be used to fund construction before pledged donor/gift funds are collected. The program is not a revolving credit line, repaying the loan all or in part does not increase program accessibility
Interest Rate: The interest rate shall be established at the time of first draw and will be fixed for the duration of the loan. The interest rate is determined by adding together a verifiable interest rate plus a spread.
Payments: Amortization and debt service schedules will initially be provided at the time of issuance, and will be amended as draws and repayments occur. Interest shall be paid monthly. There are no costs of issuance associated with this program and there is no prepayment penalty for repaying loans sooner than anticipated.
Program Size: The minimum initial Bridge loan size is $2 million. Excluding the final repayment, principal repayments shall occur in increments of no less than $100,000.
Final Amortization. No loan shall be outstanding more than 5-years after Board approval. The borrower shall be asked to repay outstanding program balances in full at the end of the 5-year period.
Loan Process: Use of the Bridge Program is determined as part of the typical due diligence process associated with project and funding approval. Please contact your Treasury representative.
Ongoing Disclosure and Program Requirements: Borrowers are asked to provide quarterly reports on the status and timing of pledges/gifts, and the level of unrestricted reserves that could be used to pay the loan if necessary. The department must hold unrestricted reserves equal to 20% of the original loan amount as long as the loan is outstanding.