Many banks don’t have experience in lending to churches. They’re commercial lenders, and their mission is more transactional than facilitating God’s call and life-changing ministry. But some organizations specialize in serving churches through lending. These lenders understand the unique requirements of church-related lending and are typically passionate about the ministry themselves.

Requirements for getting a church loan:

A few requirements must be met before getting a church loan. First, the church should have a history. This can give the lender an idea of how long the church has been around and how it has served its community. The history should include the church’s date, where it is located in the community, notable events and programs, and a description of the services the church currently offers. Churches should also present a complete accounting of their debts.

The church should be able to repay the loan on time. The maximum amount a church can borrow is three times its undesignated income. It should also be able to cover its personnel costs, which should be 40% to 50% of the total. The church should also be able to contribute at least 25% of the project’s cost.

Getting a church loan from a lender that understands your mission and objectives:

Getting a church loan is a great way to finance your ministry, but you’ll want to choose a lender who understands your mission and objectives. You’ll also want to know how much you can borrow so you can negotiate a loan that fits your financial situation. Banks and other lending institutions often offer varying borrowing capacities, so you’ll want to find one with a favorable interest rate and short payback periods.

Lenders that specialize in church loans understand your mission and objectives. These lenders are not commercial banks; they are dedicated to helping churches with their mission and goals. Banks and other commercial lenders are more transactional and have less experience in lending to nonprofits. Church leaders understand this and are passionate about what they do.

Getting a church loan from a bank or other financial institution that understands your undesignated income can be a tricky process. Churches can borrow as much as three times their undesignated income, but they should make sure they can make the payments. If you are not sure how much you can borrow, talk to several lenders before making your final decision. It’s also important to consider how your congregation will be able to pay back the loan in 15 to 20 years. Churches should choose a lender that specializes in this type of loan and is committed to your ministry.