by Laura Czingula
Editorial Director
The University of La Verne has established a $1.5 million credit line through Wells Fargo Bank.
The credit line is not a loan. It is money that is available if the school should need it. Therefore, if the University is running low on money to pay the bills, it can use the credit line.
“The money is just in case the bills can’t be paid,” said University of La Verne Treasurer Avo Kechichian. “It is just for emergency purposes.”
President Stephen Morgan said the credit line would be used as a safety margin and would give the University the ability to borrow “if we need it.”
Because ULV is a tuition-dependent institution, cash flow can be sporadic. Early in the semester, Student Accounts receives money from tuition payments and paying bills is not as large of an issue, but later on, the cash flow tends to be lower and the money situation becomes more of a concern.
“Last year was a flat year for students and tuition was low, we are just taking precautions if that should happen again this year,” said Kechichian.
Running low on money to pay the bills is nothing new for La Verne. Unfortunately the tuition of students does not pay for everything.
“About seven or eight years ago, ULV had to do this same thing due to low cash,” said Kechichian. “That time the credit line was with the Bank of Industry.”
“La Verne’s biggest financial concern is the payroll.” Kechichian said. “Let’s say we need $200,000 to meet payroll, we would then tap into the credit line, take what we need to attend to the payroll and pay it back within a month when the cash flow is higher.”
When asked if La Verne is financially unstable, Kechichian said, “I don’t see us being in financial problems at all. The credit line is just in case we can’t meet the bills.”
Once the University taps into the credit line, it must be paid back in a reasonable amount of time. The credit line expires when the academic year is over and if the University should wish to have a credit line for next year, it would have to renew the credit line application and put in a new request with Wells Fargo.
“A lot of organizations and companies have credit lines,” said Kechichian. “This is nothing new.”
Dr. Morgan described the credit line as a normal procedure saying, “You would find that most institutions have a line of credit.”
The paper work for the credit line process will finish up toward the end of this month.
