Church Financing
There are many options for Church financing. No single type of financing can be called best for all Churches. Just as each Church is unique, a lending institution has its own characteristics as well. As a result, every Church loan, whether for building a new sanctuary, renovation of an existing place, a new outreach center or refinancing, is also unique.
We always recommend to our client that they establish a predevelopment budget. Available dollars are necessary to fund initial items such as preliminary design, legal services, marketing, accounting, etc. Many lending institutions that we work with will lend their client funding for pre-development cost.
Over the years, THE VAUGHN GROUP has noticed that Churches had difficulties financing their projects. There is not one particular solution to this mammoth problem. Some Churches have inroads to dollars, lenders knocking on their doors, yet others have difficulties securing financing for a variety of reasons. Yet, still church building projects must go forward. Church financing has changed dramatically in the last few years. At one point, Churches could obtain construction loans from commercial lending institutions, savings and loans, insurance companies, pension funds, or other private lenders. Considered important community development, Church construction and renovation projects often received loans at below market rates. In recent years conventional lenders have been reluctant to loan large sums of money to churches, though this is now changing. Lenders are realizing that it is good business doing business with Churches. Though financing a Church can be difficult today, Churches can still find lenders favorable to their request for a loan. To get started on your search for capital to build or expand your Church facility, consider the following avenues.
The Church must realize that for the most part, a new worship facility can take up to three years to build, and with a medium size renovation project it may be as many as a couple of phases. With interest rates, bank and personal changes on a regular basis, locking in a loan can become very critical in the building process.