Capital equipment is generally regarded as nonexpendable, tangible personal property having a useful life of more than one year. Equipment Loans approved for RFS financing by the Board of Regents are funded through the ILP. The institution will be charged the Short-Term Rate and principal on all outstanding balances at each quarterly repayment date. The amortization schedule of each loan should generally match the life of the equipment and is limited from three to ten years. Prior to funding, the final schedule and a Promissory Note will be sent by the Office of Finance to memorialize the terms of the loan and will need to be executed by the Chief Business Officer of the borrowing institution.
Since equipment loans are typically funded with proceeds from tax-exempt bond issuances, the equipment will continue to be subject to file retention requirements as dictated by UTS Policy 181 (available at the BOR Policy Library HERE) as well as private use restrictions as dictated by IRS regulations (available HERE). A taxable Short-Term Rate (as determined by the cost of taxable commercial paper plus the Short-Term Premium) can be charged in lieu of the tax-exempt Short-Term Rate if the institution would prefer to not have the equipment subject to these requirements.
Around June 1 of a given year, the Office of Finance solicits each institution's anticipated equipment funding needs for the coming fiscal year. Institutions requesting equipment financing provide a brief description of the equipment to be financed, including expected purchase dates, projected useful life, and the payment source. The Regents vote on approval of the equipment financing requests submitted by the institutions during each August meeting of the Board of Regents. The Equipment Financing Guidelines set the minimum equipment debt issuance $100,000 per institution, though several smaller equipment purchases can be bundled to meet this threshold.
Request for Reimbursement Form (Adobe PDF)
Promissory Note Template (Adobe PDF)