Political Campaign Loans & Loan Agreements | Green Day Online
Political committees and candidates can take on campaign loans.To be eligible for repayment, the loan, whether in-kind or monetary, must meet the following requirements here at GreendayOnline.com:
- Written loan contract that is executed after the loan is taken, and
- Accurately and punctually reported as a loan in the beneficiary’s PDC reports.
Loans and Limits
Candidates can get by up to $6,000 in the amount of a personal loan for their campaign. A commercial loan made to the candidate’s committee is believed to be backed by the candidate in the absence of solid, convincing, and clear evidence to the contrary.
Contribution limits are applicable to loans to other lenders make to political parties, candidates as well as caucus committees.Check out the PDC’s contribution limit chart for the current limits.The spouse of a candidate is bound by contribution limits, therefore the candidate must ensure that their share of the joint assets is used to fund every personal loan.The Commission has established the “personal funds” of a candidate as:
- Half of the jointly-owned assets, like an account at a bank, if there isn’t an expressly-described division
- Employment income,
- Investment dividends/proceeds.
State law prohibits the legislative, judicial (other aside from those who are not the Supreme Court), and local candidates and political committees from taking over $5,000 in cash from one source in the final three weeks prior to the general election.This applies to loans granted during the three-week period.
The limitations of the mini reporting option are greater than the other limitations, provided that the borrower has been already registered under mini reporting.
The terms of the loan, including rates of interest, intervals for payment, and amounts, as well as the due dates are subject to the lender as well as officials of the political committee, whether they are candidates or.The terms may be modified throughout the duration of the loan with the agreement of both parties.
The due date can be a certain date or a flexible date for example “when funds are available.”
Any terms that are agreed to and any modifications to the terms agreed to between the two parties should be outlined in a written loan contract or in a written amendment to the loan agreement.
A receipt for expenses out of pocket is sufficient as the loan contract for an in-kind loan as long as it specifies the date on which the purchase was made, as well as the amount due to be repaid it is signed by the treasurer and the person who spent the money.
Loan agreements are included in the campaign’s documents and should be incorporated into the books of accounts in the event that they are made accessible to be inspected.
Report on time and accurately the amount for repaying loans.Also, report when a loan provider will forgive a portion of the loan.
If a third party repays the entire amount of a loan for a campaign, the person has made an in-kind contribution to a campaign, subject to contribution limits applicable to that particular campaign. The loan-related payment-in-kind contribution has to be promptly and precisely reported.
A single-year campaign or candidate can carry forward loans unpaid for a later campaign.The carryforward appears in the committee’s last C-4 report and the committee’s initial C-4 report.A loan forward carried forward will have no effect on the contribution limit of the lender in the current campaign.
Ideally, political candidates and committees are able to report loans accurately when they receive them, and repayments are also disclosed.The Commission is aware however that errors can be made and a loan could be classified as a contribution, particularly a loan made by the candidate.The Commission has ruled that a loan can be reimbursed if it was wrongly reported as a donation and the campaign has signed the loan agreement in writing at the time the loan was made.