The Do's And Don'ts Of Church Financing

As a Midwest leader in church lending, Pinnacle Lending Group has garnered a wealth of knowledge and experience. We'd like to share some of this information with you; we hope you find it helpful.

1. Deal with a lender who demonstrates an understanding of churches. Ask the lender how their church loan products, features, and covenants differ from their standard commercial loans. These subtleties can have a significant impact on future costs and your church's autonomy to effectively manage its operations.
   
2. Have your financing firmly in place, in writing, before starting your project. This will ensure that the project is started and completed in a timely fashion. This avoids the potential for costly delays and the inconvenience of mechanic's liens being filed.
   
3. Before tendering escrow dollars under an agreement to buy land or buildings, be aware of entitlement, zoning and environmental issues. An experienced church lender should be able to assist you with these matters.
   
4. Ask the lender and the contractor for references from other churches of comparable size. References will help you choose the right partners to make your project go as smoothly as possible.
   
5. You should have a banker who is knowledgeable about church operations and ministries and is experienced in lending to churches. Simply ask how many years the bank has been lending to religious organizations, how many loans have been made, and how large their full-time church lending staff is.
   
6. Look for an experienced church lender that can act as a consultant and be a referral source for other church industry professionals, such as fund raisers, growth planners, architects, CPAs, and contractors.
   
7. Avoid mortgage brokers or lenders who ask your church to sign something prior to analyzing a loan application and offering a financing commitment. You should not have to pay a fee prior to reviewing the terms and conditions of a firm offer.
   
8. Meet with the bank to discuss the scope of the project before you spend large sums of money on architectural designs that may be too costly to build.
   
9. Don't depend on the sale of your current facility or other uncertain future events to provide the funds to complete construction of your project. Circumstances beyond your control could disrupt your financial plans.
   
10. Deal with a bank that has demonstrated years of consistently lending to churches. Newcomers to the industry may not be there when you need to refinance or begin your next phase or project.

We hope these tips will help your project go smoothly. At Pinnacle Lending Group, we have an entire network of professionals who work exclusively with churches full time. We are dedicated to meeting the needs of churches and the communities they serve. Isn't that the kind of dedication you would like from your financial partner? If you would like to speak to us about a project you're considering, please call us at 1-800-997-4662 Ext. 108.