Understanding your church’s financial state

UBT’s Charity Kuehn shares her wealth of knowledge on what to do if your church has had difficulty securing funding.

June 26, 2024
A water color of a church in a small town

Every day, I talk to so many church leaders who are frustrated with their current loan (or lack thereof). The most common conversation I have revolves around explaining why a bank isn’t going to be interested in their project or loan, then offering a few basic changes they should consider to put themselves in a better financial situation.

Presentations matter

First, church leaders must understand that your financial presentation might be one of the most important components of your loan approval. If you provide a bank with a spreadsheet of income and expenses that was put together by your volunteer bookkeeper, you may face an uphill battle with your lender. The moment they don’t understand your numbers, they’re going to start dragging their feet.

There’s absolutely nothing wrong with utilizing volunteer staff; just know that 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 on the financial statements and what they comprise. If this is not someone within your church team, a consultant or your accountant should work with the bank directly.

Paint a thorough picture

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

Get the right help

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 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.

  • Overall philosophy is key. Do they just want to take your info and cram it into a form, or do they plan to take the time needed to actually help you be a better, more sound organization?
  • What is their experience? How many churches have they helped?
  • Are they a “broker,” and if so, what is their fee? Ask about all the fees they will charge and if there is anything they will try to charge a potential lender.
  • How many banks or financial institutions do they have relationships with?

Involving the right team of people can make a real difference in the terms you receive 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 reviewed, contact me below.

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  • Church Loans

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