Lending money
This part of our finance procedures gives guidance on giving short-term financial support to a unit or level
This guidance is part of our finance procedures.
Last updated: 6 November 2024
Sometimes you might need to help support units or levels below with a short-term loan.
A loan might be needed to help a unit meet a one-off or unexpected increase in costs, especially if they've not yet had a chance to build up reserves. A loan can only be made by district level or above, and it should only be made for essential expenditure to keep the unit or level running.
This type of financial support can be helpful. But loans do carry some risk, which is why units aren't allowed to lend money.
Download our template loan agreement (PDF).
Before making a loan:
- Make sure the leader or commissioner of the unit or level requesting the loan isn't part of the discussion about whether the loan will be given.
- Make sure you're confident that the unit or level will be able to pay it back.
- Check that the financial difficulties haven't been caused by the mismanagement of funds.
- See if there's other forms of financial support available to them, such as grants.
Any loan made must be accompanied by:
- A clear written agreement that sets out the amount loaned, the period of the loan and the terms of repayment. Also, any other relevant details, such as the reason for the loan.
- Clear details of how approval has been achieved for both parties. This could involve the leadership team, commissioner or the level’s executive committee.
