The Internal Bank (IB) integrates the three primary functions of treasury management: (1) cash management, (2) limited term investment management (i.e., management of non‐endowment assets), and (3) debt management (both short‐ and long‐term). The IB manages about $1.2B in assets as of June 30, 2022 from a combination of activities involving operating cash, bond proceeds, and loan payments while utilizing external consultants to assist with the management of the investment and debt portfolio.

Internal Bank Central Loan Program

The Internal Bank (IB) distributes funds for capital projects and strategic initiatives through the Central Loan Program. Funds available for lending include the following:

  1. Proceeds from new debt issuance.
  2. Proceeds from repayment of internal loans via the Central Loan Program.
  3. IB liquidity, to be provided through university cash or external borrowing, after considering:
    • Anticipated external debt service requirements
    • Operating cash flow needs
    • Operating costs of the Internal Bank
    • Adequacy of IB reserves, such as an interest rate reserve (The IB may build and maintain an Interest Rate Reserve to hedge future volatility in debt and investment markets.)

The Central Loan Program can provide lending to departments or units for:

  • Interim/bridge financing in anticipation of philanthropy or other external sources of funds.
  • Financing options for projects with an identified internal/operations repayment source accompanied by an amortization schedule consistent with the useful life of the project.

Bank Interest Rates

Effective August 1, 2023

Term Annual Rate
Construction/Bridge 4.00% (1)
Term <= 10 Years 4.00%
Term > 10 Years 4.99%

(1) The annual rate will reset to the then current long-term rate 5-years from the loan effective date







More Info

Internal Bank Annual Reports

University Budget Conversations - March 2, 2023

University Budget Conversations - May 9, 2019

Internal Bank Funded Loan Types

Interim Loans

Interim loans are used to provide funding on an as‐needed basis during project construction. Interim loans pay monthly interest on the total balance outstanding plus any current negative balance. Internal Bank funds are advanced, up to the maximum loan amount, as the project requires. Principal payments are typically not made on interim loans during the construction process except when pledges are received for gift funded loans. 

Permanent loans

Permanent loans are used for asset purchases and when no additional internal bank lending is available or required for a project. Debt service payments are recorded on a semi‐annual basis to repay the project's total loan balance amortized per the terms of the internal financing agreement.