Giving short term financial support to a unit or level
Sometimes it's a good idea to help support units or levels below with a short-term loan.
This guidance is part of our finance procedures.
A loan might be used to help a unit cover their subs, or meet a surprise increase in rent at their meeting place, especially if they've not yet had a chance to build up reserves.
This type of financial support can be helpful. But loans do carry some risk, which is why units aren't allowed to lend money.
Before making a loan:
- 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, the frequency and speed of repayment and 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.