Borrowing money may support a First Nation in carrying out its projects and plans.
Under the FAL, Council must create a policy to show the steps needed for when the First Nation wants to borrow money.
This includes the management and use of the borrowed money, as well as the steps for new borrowing, including:
- thinking carefully about any debt for the First Nation that may be created because of borrowing money
- weighing the pros and cons of different ways to borrow money
- accepting the rules and standards of debt responsibility
- including members or letting members know certain information as outlined in the FAL
- keeping good records for money borrowed. This includes the first amount borrowed, the date(s) that all or any part of the first amount must be repaid, the date(s) when interest on the debt must be repaid, and the cost of borrowing (including interest payments and service or other charges)
This policy includes the steps to make sure that:
- all payments are made on time
- the debt payments are tracked and recorded
- all debt responsibilities are reported as needed by the FAL and any other agreements attached to the borrowing of money