3 tips for getting a church loan

Every day, our team talks to church leaders who are looking for additional financial support. They’ve grown frustrated with their current loan (or lack thereof). All too often, the conversation becomes an explanation of why a bank isn’t likely to be interested in a project or loan and then giving them a few basic changes they should consider position themselves stronger financially. If you find yourself wondering what you could do to put your church in a better position, here are some tips to consider.

Financial presentation

First, your financial presentation can be one of the most key components of your loan approval. If you provide a bank with your income and expenses in a spreadsheet, put together by your volunteer bookkeeper, you may face an uphill battle with your lender. The moment they don’t understand your numbers, they will begin dragging their feet.

There is absolutely nothing wrong with utilizing volunteer staff; however, when it comes time to make a presentation to a financial institution, you will need to provide professional-looking, balanced financial statements.

Along with good reports, YOU should also understand your numbers. The person speaking to the bank should have a strong grasp of the financial statements and what comprises them. If this is not someone within your church team, a consultant or your accountant should work with the bank directly.

Provide all relevant information

Second, be sure to provide the bank with all the information they will need to know to get you an approval. Banks want to understand how your church is the way it is and can often be quick to make a judgement or decision on a credit if all the information isn’t presented. Tell your story. Include information about your congregation like average age, where people are coming from to attend your church, and how many people give on a consistent basis to your church. If you have ANY challenges to your loan, share that information. Transparency is key to this type of relationship!

Work with someone you can trust

The challenge most church organizations face is having the staff or time to do what is needed to get their financing needs met. Having a professional compile your information for you to be presented to a bank can be a great solution. There are many different types of professionals in the market who may be able to help you put together a loan request package that is both professional and complete. They may also have access to many lenders, increasing your chances of receiving a competitive loan offer. Here are a few guidelines to follow when hiring a consultant to assist you.

1. Overall philosophy is key — do they just want to take your info and cram it on the form they use or do they plan to take the time needed to actually help you become a better, more sound organization?
2. What is their experience? How many church loans have they closed?
3. Are they a “broker” and if so, what is their fee? Ask about all the fees they will charge and if there is anything that they will try to charge a potential lender.
4. How many banks or financial institutions do they have relationships with?

Involving the right team of people can make a real difference in the loan terms your church receives and the timing it takes to get a loan in place. Always take this process seriously and approach it as a major component to your financial success.

For questions about a financial health consultation or to have your loan options review, contact UBT’s church lending team.