Loans Policy

1. Authority
   1. These guidelines are in all respects subordinate to the articles of incorporation, by laws and standing rules of the organization.
2. General
3. This organization is not a bank and is not in the business of lending money. Any organization applying for a loan should approach their own bank, members and/or board or attempt some other fundraising activity. Any organization applying for a loan must understand that this organization will only consider granting a loan in the most exceptional of situations and only as a last resort. This organization may, however, in exceptional circumstances make loans from time to time to other organizations and such requests shall be reviewed on a case by case basis and shall be subject to the strict criteria below.
4. Eligibility
   1. 3.1 In order to be eligible for a loan from the organization the borrower must:
      1. be a 501(c)3 corporation and/or existing community partner of the organization
      2. have a mission statement and exempt purposes consistent with the exempt purposes of the organization
      3. unless it is a Pride organization, have its principal office and deliver its services principally within the Bay Area
      4. No borrower shall be eligible for a loan until the expiration of 24 months since the repayment of any prior loan from the organization
      5. For the avoidance of doubt individuals and for-profit businesses or business ventures shall not be eligible for any loan from the organization
5. Size of Loan
   1. 4.1 Subject to 4.3 and 4.4 below, the minimum loan shall be $3,000
   2. 4.2 Subject to 4.3 and 4.4 below, the maximum loan shall be $20,000
   3. No loan shall exceed more than 10% of the annual gross income (as reported in
   4. the last completed accounts covering a 12 month period, or longer) of the borrower
   5. No more than 10% of the net assets of the organization shall consist of loan(s) at the time any loan is made
   6. All loans shall be subject to the borrower obtaining (at least) matching funds from a financial institution.
6. Administration
   1. There shall only be one loan outstanding on the organization’s books at any one time, regardless of size
   2. All requests for loans must be made in writing
   3. All loans must be evidenced by a loan agreement which shall specify (amongst other things) the principal, the interest rate, whether the loan is secured or unsecured, the collateral (if any), guarantees (if any) and the repayment schedule
   4. Wherever possible loans should be secured against collateral and/or guarantees
   5. All loans shall attract interest at 2% above the unsecured business lending rate for the time being of Wells Fargo Bank.
   6. Loans shall be for a minimum 6 month and maximum 12 month period unless the borrower shall be a Pride organization in which case the maximum period shall be 24 months.
   7. If successful, the borrower must agree to participate in the organization’s community partners program and agree to any monies inuring to the borrower from that program being a lien/first charge in favor of the organization against default by the borrower.
   8. All loans must be approved by the Board.
   9. Even if the applicant for a loan qualifies to apply for a loan under this policy the Board may deny any request with or without reason.
   10. In the event that the borrower shall adhere to the repayment of principal schedule agreed with the organization, the Board may vote to forgive the interest, in whole or in part, i.e., make a donation of the interest to the borrower.
   11. In the case of default by the borrower, the Board will meet and determine an appropriate course of action.

Approved: by the Board 04.03.01