Healthy Ministries... Healthy Borrowers
What happens next will vary from church to church. In every case, the church should evaluate their financial health, operations, governance, and even their organizational structure. It's important to make sure that your church can support the debt that you are requesting.
After evaluating the church, in most cases, it will be necessary to make some changes before you present your application to potential lenders, ...
You've decided you need a church loan. Now what?
SAVE TIME, IMPROVE RESULTS
Our consultants average more than 17 years of experience helping churches and ministries arrange loans. Collectively, we have advised on more than $2.5 billion in loan requests throughout the nation. We have worked with more than 1200 churches and ministries and we have worked on every type of loan transaction out there including church construction loans and church refinance loans.
Church leaders save time and effort by having our experts manage the process of applying for a church loan. We leverage church resources so that our consultants can structure the request and respond to lender inquiries. Your staff is freed up to concentrate on doing the ministry work that they are gifted to do. Our processes are meant to increase your effectiveness.
MULTIPLE LOAN SOURCES
BANKS, CREDIT UNIONS, FOUNDATIONS
THOUSANDS OF CHURCHES SERVED
We have developed solid relationships with a number of banks nationwide. Knowing what sort of church loans these lenders are looking for and just what info they require will save you time and money as you pursue your loan. Having a variety of lender relationships enables us to provide you with options... always a good thing when money is involved.
After several years of looking, the church had finally found a property for a reasonable price that they could move into. Moving out of their rented facility had always been a dream, but they had never been able to find just the right permanent home. Even this option was a little bigger than they really wanted and a little more expensive, but it just felt like this could be their new home. The congregation seemed excited and it felt like the members would be able to make up any funding gap that they encountered as the church moved forward. So they set out to find a loan.
The church leadership had been sending their financial statements to any lender they could think of for months. Several explained that they did not do church loans. The other lenders, the ones that had done church loans in the past, were pleasant, but all of them said that they could not help the church at this time. All of them referred to one or two ratios to explain their decision. But after all the submissions and all of those pleasant conversations, the church team was not any closer to finding the funding that they needed, and even worse, they didn't fully understand why they were being turned down.
We can help you structure your application and find a lender... Time and even opportunities can be lost if a church does not slow down and evaluate their readiness to borrow. It's also important to have someone who can translate for you when a lender is explaining their view of your church. Contact us.
Now what? ... Identifying the areas that need changing and just how to go about making those changes will require insight into standard church operations or the specific underwriting criteria of a number of potential lenders.
Once you have identified potential weaknesses and corrected them, you'll need to structure your request and prepare your application. The structure should be well thought out and it should consider lender priorities as well as your own. Then you'll be ready to prepare the application package. The bulk of the information required by each and every lender is very similar. The challenge is to make sure that the lenders do not make their evaluation of the church based strictly on the raw data that you provide to them. You'll often need to anticipate lender questions and answer them even before they ask. This entire process works best when the structure and the application package are well thought out and give the lender "an excuse to say yes." With most lenders, their entire credit evaluation phase is aimed at identifying unacceptable risk. Explaining away apparent risk before lenders form a negative opinion is critical. This requires that you think like a lender.
The next step is to decide which lenders you will submit your application to. To do this well, you should know which lenders are actively seeking church loans and what their credit criteria is. An application should also be adjusted to reflect the unique pricing requirements of individual lenders. It's also best to know if they require specific information or forms.
Once the lender has the application, there is a period of time that they will need in order to review the information. It is common for them to ask clarifying questions regarding the ministry or the request. It is critical that these questions are first, understood by the church, and second, answered quickly and confidently. It is best when the questions were anticipated and an answer is already prepared. Anything less than quick, confident responses could make the lender wonder about the quality of the church's management.
If the loan is approved, there could be a need to negotiate either the price of the loan or the structure or even the covenants and conditions. Small changes in any of these areas can result in either a significant change in the lifetime cost of the loan or dramatic changes in your long term relationship with your lender. Negotiating in good faith while seeking an outcome that is mutually acceptable is best done when you know what that lender has required in the past.
The last step is the funding of the loan. In some cases, the time between approval and funding can be a hassle-free, worry-free experience. In most cases, it is not. You'll need to maintain communication with your lender through this phase to make sure that all of their requirements are met as quickly as possible. Once that is accomplished, your loan documents will be recorded and the proceeds will be disbursed.
Navigating this process can be daunting. We have the experience and the relationships needed to help you get through all of this effectively and efficiently. And, by managing the process for you, we eliminate most of the hassles and distractions and frustrations that are normally a part of every loan application.
church loan experts helping to make your vision a reality