How Churches Really Get Loans

In 2007, money came fast and easy to a lot of churches. However, with the Great Recession the money dried up … forcing churches to work much harder for funding.

Below is a short guide on how churches today REALLY get funded.

1) Capital Campaign / Generosity Coaching

– find a really good firm that can help you do this. This area is a tough one for most church leaders … because they admittedly are not the best at asking for money … and developing a culture in their church for generosity to prosper. This is also a significant area where a good firm can help you cast vision around cash.

2) Quality Brokers

– here’s the deal … sometimes you need a person who hunt down the best deal(s) for your church’s paper … when your “credit” is less than perfect as a church. A lot of banks in the US simply freak out with churches who don’t have deep pockets, are non-denominational or community based, and are not tied to a wealthy denomination. That’s where a broker can come in and assist you.

3) Church-Focused Banks

– there are very good banks out there with people who are top-notch. If you are a church with a solid history, growing attendance, and positive cash flow … a traditional bank that focuses on church loans may be a great thing for your church. If they feel like you are a good fit for their portfolio of loans … they will hunt you down. When they don’t believe you are a good fit … no one will call you or knock on your door. In that case … call a broker.

4) Being Realistic About What You Will Get

– churches, in general … are awful at this. If your annual income as a church is $400,000 per year …. don’t assume you can get a loan to build a $10,000,000 facility. It will not happen. Why is this so important? Because if you cast vision on a building you cannot afford (or get a loan for) … you are going to kill momentum in your church AND people will likely think your leadership team’s mind is stupid.

5) The Power of Cash Flow

– cash flow matters … especially if it is positive! This is a great way to show a bank/lender that you are responsible with your money as an organization. Essentially … you spend less than you take in. Novel thought! Banks look at your cash flow detail … and can tell how you spend your money. Among other things … they look at this … to make sure you will have enough to pay your monthly commitments AND pay their fancy new mortgage.

6) Having a Mission/Vision that is REAL, Transferable, and Lasting

– getting funded for a loan, if your church needs one … is truly a matter of vision. It starts with vision and ends with vision. People will not follow you, tithe, or pay down your mortgage if they can’t follow your vision for their church. Just blindly assuming people will be very excited to pay off a loan is just naive.

Navigating the waters of church funding can be rough. In my consulting with churches … I’ve walked along scores of churches in their search of funding … and #6 above is the key … even in a down economy.

Think I missed anything about this topic? Want to ask me who I would call on to help your church? Feel free to leave comments or eMail me at [email protected] … and I will do my best to help you.

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Bryan Miles
Bryan is a grateful follower of Jesus, a husband, a dad, and co-founder of the Miles Advisory Group (MAG).