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Church Financing

Church financing is a “niche” within the larger lending industry. This type of financing may not be as common as others, such as residential or commercial real estate, but there are thousands of organizations interested in this type of funding.

What is Church Financing?

As the name suggests, this type of financing is saved for churches in need of money for a variety of reasons. Many banks offer church loans – some even specialize in this area.

With this type of loan, the church itself is often times used as collateral. This is very similar to using a home for collateral when buying a residential property.

Reasons for Church Financing

Generally speaking, a church loan is used for one or more of the following:

  • Church construction
  • The purchase of an existing church, building, or land for church related activities
  • Remodel of an existing structure
  • Refinance to lower current expenses

Church Loan Terms

Although some lenders require that the church itself be used as collateral, this is not always the case. Many lenders offer unsecured loans, taking some of the risk out of the process. Churches searching for an unsecured loan will need to rely on their credit history to apply for financing.

Church loans can range anywhere from $100,000 to $1 million or more. It usually takes between one and three months to close the loan.

Who Qualifies for a Church Loan?

Most of the time, the only entities that qualify for church financing are as follows:

  • Churches
  • Some non-profits involved directly with religion
  • Some 501(3)(c) Non-Profits

Documentation

The initial requirements for church financing include three years of income/expense statements, as well as any current partial year statements. Along with this, a balance sheet showing assets and liabilities is also required.

From new construction to a major renovation or refinance, with the right church financing it is easy to complete your project and/or better organize your debt. 

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