Loans Policy
1. Authority
This policy is in all respects subordinate to the Articles of Incorporation, Bylaws, and Standing Rules of the organization.
2. General
SF Pride is not a lending institution. Organizations seeking financing must first explore commercial lending, community support, and fundraising avenues. SF Pride considers loans only in extraordinary circumstances as a measure of last resort, subject to the strict criteria below.
3. Eligibility
To be eligible for consideration, a borrower must:
A. Be an established 501(c)(3) non-profit organization or existing community partner; B. Possess an exempt mission consistent with the purposes of SF Pride; C. Maintain its principal office and deliver services primarily within the San Francisco Bay Area (unless the applicant is a peer Pride organization); D. Have completed repayment of any prior loan from SF Pride at least 24 months prior to application; and E. Be an incorporated non-profit entity. Under no circumstances are loans made to individuals or commercial, for-profit enterprises.
4. Size and Financial Limits
A. The minimum loan amount is $3,000. B. The maximum loan amount is $20,000. C. No loan shall exceed 10% of the borrower’s gross annual income (as verified by its most recent 12-month financial statements). D. Total outstanding loans shall not exceed 10% of SF Pride’s net liquid assets at the time of issuance. E. All loans require matching financing or verification of support from an established financial institution.
5. Administration
A. Only one loan may be outstanding on the organization’s books at any given time. B. All loan applications must be submitted in writing. C. Every loan must be executed via a formal loan agreement specifying principal, interest, term, security/guarantees, and repayment schedule. D. Wherever feasible, loans shall be secured by collateral or organizational guarantees. E. Loans bear interest at a rate 2% above the prevailing commercial lending prime rate. F. Loan terms shall range between six (6) and twelve (12) months (up to 24 months for peer Pride organizations). G. Borrowers must participate in the Community Partners program, with partner disbursements subject to a first-priority lien against loan default. H. All loan agreements require explicit Board approval. I. The Board retains absolute discretion to approve or reject loan requests. J. If a borrower completes principal repayments in full compliance with the agreed schedule, the Board may vote to forgive all or a portion of the accrued interest. K. In the event of default, the Board will determine appropriate collection or legal remedies.
Approved by the Board: April 3, 2001