We have as much work with churches and schools trying to secure property or relocate as we have had at any time in the last fifteen years. The economic slowdown has resulted in some good buys on land, and the low interest rates are generating activity. However, the economic slowdown has impacted contributions and capital campaigns for some congregations, and for those churches their answer is to be conservative in their building or expansion programs.

Another significant change over the last year has been the slowdown of some commercial banks and their tightening of credit. Two major banks who previously were extremely aggressive in funding church loans have tightened lending to churches. Even churches with extraordinary equity in their current facility seeking only 60% loan-to-value loans, (i.e., they have a 40% equity) and, with only 25% of their monthly contributions being paid toward indebtedness, are being turned down for loans. It is understandable for banks to tighten their lending during an economic slowdown. However, we have been successful in getting loans for these churches, but it has not been at the usual banks. As always, we have had to work very diligently and creatively to find funding for churches.

Funding continues to be a major hurdle for churches and schools. Overcoming that hurdle requires proper financial records, establishing clear internal budget limitations, and working with a lender who will give the borrower a decisive preliminary commitment before the church needs to borrow money. The most common predicament for churches is putting together a building program or acquisition and later finding out the church cannot borrow the necessary funds for their project. Money spent on architectural plans worth thousands and thousands of dollars are sitting on shelves at churches because no one secured a preliminary loan commitment and established a workable expansion or relocation budget. Spending the money on plans that cannot be used produces distrust in church leadership. The principle of “Counting the Cost” is a universal concept.