Church loan questions - Part 3 Back to blogPosted by: CIF Staff

Welcome to Part 3 of the three-part series on important questions to ask when considering a church loan. Part 1 focused on overall church questions, and Part 2 focused on church finance questions. In this post, we’ll concentrate on church facility questions.

Part 3 – Church Facility Questions

1. Do you have equity in the current church property? Equity in church property is the difference between the current church property value and the amount of outstanding loans. Having equity in your property along with being able to afford a larger loan payment are the two largest hurdles in qualifying for a loan.
2. Are you a small church considering purchasing a small facility or renting a space just to “get by?” Sometimes it’s better to rent a facility and wait till it’s financially feasible to purchase a facility that meets your needs. Churches often quickly outgrow their small, owned buildings. Selling these outgrown church facilities can take years in a slow-moving real estate market. Renting frees you from owning a small church building that can hamper your ability to jump on a better opportunity—whether a purchase or another rental—when it comes along.
3. Are you considering purchasing any facility for your fast-growing church to accommodate its increasing congregation? Renting may be the best option for you. One healthy, growing church did not have a permanent home for 20 years. The church originally started in a residential home, moved to a grade school, moved to a larger grade school, moved to a strip mall, moved to a small amusement park, moved to a high school, bought about 100 acres and finally built a permanent home perfectly equipped for their large congregation. Once moved into its home, the church focused on church plants since it understood and had a passion for expanding churches. Today, they have five church plant locations.
4. Are you considering adding a new facility to your campus or buying an available building to convert it into a church? We have seen many churches buy a wide variety of buildings and convert them into churches. Old church facilities, commercial properties like bowling allies and theatres, retail buildings and strip malls have all been renovated and converted into churches. It’s about the church community, not the building, so purchasing an existing building may be the right option for you.

To read stories of churches that have partnered with CIF on a church loan, church refinancing or on other church financing needs, click here!

Interested in a church loan or learning more? Contact us today!