Line of Credit
The diocese has a line of credit that may be available to qualifying congregations for capital projects.
(Created March 1, 2023)
Complete the application below. Save your entries as you go. You can close the program and return to the application. The application can be submitted only after all entries have been completed.
1. All applications must be received during the first week of the month in which a loan is requested. This allows time for CFO and Finance Committee review in advance of the Executive Council meeting. Applications received after the first week of the month will be processed for the following month.
2. Once submitted, the application is automatically sent to the Diocesan CFO.
3. The CFO reviews the application and may contact the applicant for clarification or additional information.
4. After the CFO review, the application is reviewed by the Finance Committee. Further documentation or clarification may be requested.
5. After Finance Committee review and approval, a recommendation is made to Executive Council to approve the loan.
6. The Union Bank loan package is completed by the applicant and the Diocese.
7. The applicant signs a promissory note and can begin to draw down funds.
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Who is eligible to borrow money?
Loans are available for parishes, missions, and diocesan institutions of the Diocese of California.
For what purposes may the loan proceeds be used?
With limited exceptions, loans are for interim funding of building expansion, capital improvements, or major repairs to facilities owned by the organization.
If proceeds are used for construction projects, can draws be made over a period of time as needed for scheduled payments?
Yes, draws may be taken to fund construction projects according to an arranged payment schedule.
What is the interest rate?
Interest is at the Prime Rate and is paid monthly directly to Union Bank.
Does the interest rate change throughout the life of the loan?
Yes. The interest rate is subject to change each time the feds meet. Interest adjustments are reflected on your monthly statement.
Can the rate be locked in or fixed?
No. It is an adjustable rate. As the feds increase the interest rate, the interest rate on this loan increases. Likewise, if the feds lower the interest rate, the rate on the loan decreases.
Are there other fees?
Yes. Union Bank charges a one-time origination fee of .25%.
Does the Diocese charge a fee or generate any revenue from the line of credit arrangement?
No. The Diocese passes through the bank loan interest rate and does not charge fees or a mark-up.
What is the term of the loan?
Repayment should be made within three years. It cannot exceed five years.
Is some form of security required?
On a case-by-case basis, the Finance Committee may require some form of security such as a deed of trust, a pledge of endowment funds, etc.