There’s a lot more to church leadership than what happens on Sunday mornings and Wednesday nights. This is especially true when your church is growing—when you realize it’s time to start a renovation or new church building project in order to meet those growing needs. To help you in the planning process, we’ve talked with some professional consultants to gain insight from their experience. Recently we posted the thoughts of a stewardship consultant.
Today we’ll share a recent conversation with Pete Cassanos, vice president of Park National Bank about traditional financing. PNB is an Ohio bank with over 20 branch offices and ATMs in two counties, and it has been focusing on local families, businesses, and communities for over 100 years. As an expert in financing for churches and other construction projects, Mr. Cassanos provides details on exactly what a bank or other financial institution will be looking for from a church wanting to finance its building project.
According to Mr. Cassanos, the first thing a lender will ask about is the demographic information of your church. The lender is interested in whether you have enough active members to successfully pay back a church building loan. Typically, the bank will ask for information going back three years, including the number of giving units (usually families), the number of members, and the average attendance for both worship services and Sunday school.
If you’ve had a pledge campaign in the past, or have already begun one for this project, the lender will also want to see that information. If you don’t yet have an active campaign, they will want to see the goal and plan for your campaign for this building project—which means you will want to get that campaign planning process under way sooner rather than later!
Finally, the lender also wants any projected budgetary information you already have for the project, and a copy of any existing contracts with builders or architects.
Naturally, a prospective lender will also want to see information about your church’s finances. This includes your current balance sheet, the last three year-end treasurer’s reports, and an interim, year-to-date income statement. This is probably the most straightforward information that you will need to provide.
Finally, Mr. Cassanos says that lenders are also interested in information about your church’s ministry. This can take a number of forms, including a summary of the minister’s background, a summary explanation of the reasons for the expansion of your church building, the number of services and seats in your existing worship space, and the projected number of services and seats after your renovation or new church building project is complete. A lender will also want to see your new member package, describing your various church programs and key ministries.
Learn More with Part II
So, why does the financial institution need this information? Next week, in part two of our discussion, we’ll hear what bankers like Mr. Cassanos are looking for in all of these reports and statements—both red flags and positive indicators of a church’s health. Meanwhile, to keep learning more about the many aspects of church building projects, sign up today for our free i3 webinar series.