Church Loan - What is the right amount for your church?

It is very important that a church have a good understanding of how much money they can afford to borrow. There are many factors a church should take into consideration when planning for a church loan.

1. Size of the congregation - A church with a small congregation has less ability to weather a drop in membership than a large congregation. This can be particularly true when a large portion of the tithes and offerings come from a only a few of the congregation members.If your church finds itself in a position where a few members make up a large part of the income it can often times make sense to look at borrowing an amount that excludes the income from the top 3 to 5 donors. Although this can significantly hamper what your church can borrow it may also save your building if those members choose to leave.


2. Income trends - A church that has increasing income trends will often make assumptions around how the income will continue to grow, or how membership will continue to grow. Church leadership should take into consideration factors such as pool of potential members (demographics of the area), current economic conditions, future economic conditions, and planned special fund raising campaigns before assuming the continuation of positive income trends.


3. Cash reserves - A church that has significant cash and readily marketable investments is in a good financial position to handle any short term fluctuations in cash flow and is in a better position to handle a loan payment. It is a good idea for a church to constantly save money regardless of whether or not they have a specific use for it.


4. Leadership - A church that has a stable and strong leadership board that can easily move the congregation to give when needed is a good sign and can add comfort to a church looking to borrow money.

If you are looking for a church loan and would like to find out how much money your church can borrow please call and speak with one of our consultants or simply complete the application and one of our consultants will be in contact with you within 24 hours.