Church Financing

Church financing might seem to be a pretty straightforward process, but it can be difficult for a variety of reasons. While churches do grow old and need to be repaired and replaced, they are different projects than typical homes are. In order to secure church financing for your church, you will need to make sure you know what you're getting into before you begin.

The Potential Troubles of Church Financing

What you need to keep in mind is that not all church financing is difficult. In fact, you might sail right through the process without any issues. But most churches will have some troubles along the way. The biggest concern with the church building project is that once it's built, it's built to be a church and really nothing else. If the borrower defaults on their mortgage, the owner is then left with a church building which can be difficult to sell.

Churches are also quite extensive in terms of the building process and renovation process. Thus, once a project is begun, it can take a few years to complete before it even begins to create a profit from parishioners who might donate to the church each week.

Church financing often includes the use of a personal guarantor to ensure that the one asking for the loan is committed to paying back the loan and keeping up the ownership of the church. Again, because it is difficult to resell churches, some banks might be less than willing to grant a loan to a newer or younger church.

Church Financing: What to Do

Ideally, when you are seeking church financing, you will want to make sure to apply for longer loans. This way, not only are the mortgage payments more reasonable, but the bank has a long time to make back the money it's loaned to you and there will be more interest payments to benefit them. If you can, it will also be helpful to start off with a large portion of the church financing from savings and from parish donations. This will help to reduce the amount of money the church will owe after the building process, while also helping the bank see that they will not be liable for a larger sum than they feel is necessary.

While nothing is guaranteed in life, if you need church financing, the bank will want some sort of promise that you are going to pay back your loan before they hand over the check.