Finding an Institution That Understands Church Building Loans

Finding an Institution That Understands Church Building Loans

VaultThere’s much more to a successful church building project than the construction of the building itself. Everything—from the right location (if you’re starting from scratch), to the church design, to the finishes and furnishings and sign out front—is important for the ultimate success of your project. Stewardship, finances, and fundraising are also critical—without funding, there can be no church building project.

Our Church Building Project Funding Series

This is why we recently presented an i3 webinar discussing how to successfully fund your church building project. Most churches will have to borrow a good percentage of the money needed for a good building or remodeling project. As we discussed in our last post, churches need to understand what lending institutions are looking for in terms of financial information, and “get” the language that banks use to describe the information they need.

But churches also need to take a good look at lending institutions. You’re much more likely to have a fruitful relationship with a bank if it understands churches and their unique needs and goals. After all, as we mentioned before, churches don’t fit neatly into banks’ two major loan categories: residential and commercial, which can lead to lending problems.

Understanding What Makes Churches Different

Banks consider churches to be “commercial” enterprises (as opposed to residential), but if they haven’t worked with churches before, they aren’t likely to understand some key differences.

For example, a lending institution needs to recognize that churches are driven by “vision” rather than “business plans”—although there can be some overlap. It needs to understand that the entire church congregation has to buy in to the church building or renovation project (because their donations will fund it), rather than—as in the case of a truly commercial enterprise—a board of directors, the founder or CEO of a company, or a majority of shareholders.

Understanding How Churches Benefit the Community

Church leaders who are searching for the right lending institution should also look for a bank that understands what the church can do to benefit the community. The lender needs to know that a church building isn’t just used for a couple hours on Sunday, and it helps a lot if it also understands the community that your church wants to serve.

Your church’s vision might include a daycare or church school, community outreach programs, and lots of evening and weekend activities within the church itself. You want to have a lending institution on your side that understands what all of this contributes to the community. Your church building brings a lot of benefits to the neighborhood, and it’s important your bank realizes that.

Watch Our Webinars to Learn More

Of course, your lending institution needs to understand the emotional value that a church has for its members and the community, but there’s also the very real financial worth of a church building that needs to be taken into consideration. In our next post, we’ll talk about how to evaluate what your church building is worth. And to learn even more about church design and renovation, visit our website, where you can sign up for our free, informative i3 webinars.

2016-07-27T12:07:07+00:00 July 27th, 2016|Church Building, Financing, Uncategorized|