A candidate may loan personal funds to the campaign. The maximum amount the campaign may repay the candidate for all loans he or she makes to the campaign is $6,000 for the primary election and $6,000 for the general election. A candidate’s primary election loan must be spent on the primary and a general election loan may only be used for general election expenses. Read the In-Kind Loans section below to learn when reimbursing the candidate for out-of-pocket purchases counts against the loan repayment limit.
See related: PDC Interpretation 14-01
All loans, regardless of the source, received by the candidate or his/her campaign:
Loans to a candidate or candidate's committee from commercial lending institutions made in the regular course of business on the same terms ordinarily available to the public are considered loans to the candidate and are reported on the C-3 and Schedule L as coming from the candidate (not the lending institution). Persons who guarantee or co-sign such loans have made a contribution in the full amount of the loan. Repayment of commercial loans to a candidate or candidate's committee may not exceed $6,000 per election.
A loan from an individual, political committee, corporation, union or other entity that is received by the candidate or the campaign is a contribution to the campaign from the lender, and when combined with other contributions from that contributor, may not exceed the limit allowed by law. Persons who co-sign a loan have made a contribution in the full amount of the loan.
See related PDC Interpretation 12-01
When a candidate spends personal funds on the campaign, wants to be reimbursed, and is still waiting to be repaid 21 days after the out-of-pocket expenditure was made, the candidate’s expenditure becomes an in-kind loan. An in-kind loan counts against the candidate’s loan repayment limit. Entering an in-kind loan in the ORCA software is similar to entering a monetary loan except that a description of the purchase is included.
In PDC Interpretation 12-01, the Commission established criteria to help campaigns distinguish in-kind loans from vendor debt. This is important, because in-kind loans are subject to limits and vendor debt is not. Indicators that an item or service provided to a campaign is an in-kind loan and not a debt, include:
A debt is incurred when the candidate or the candidate’s agent places an order for goods or services, or otherwise obligates the candidate or campaign to a vendor who is in the business of selling the goods or services provided to the campaign, and the services are provided to the campaign in the ordinary course of business.
The following information must be reported for each loan received:
the names of any endorser, co-signer or loan guarantor.
Repayments are reported in Part 2 of the Schedule L and on the C-4 report. The amount contributed by lenders and co-signers is reduced as their loans are repaid, but this does not mean the candidate may be repaid more than the $6,000 repayment limit.