Unless you’ve received a truly magnificent bequest, if your church is thinking about a major church remodeling or new building project, funding has to be part of the picture. When it comes to modern church funding, know it will likely involve a mix of different options. In this post, we will take a closer look at traditional lending.

Different Sources of Financing

While some of your church project funding will come in the form of outright gifts, much of it will come in the form of pledges that will be paid over time. Still more of it will come in the form of a loan that covers the balance of the funding so that you can begin work on your church building sooner rather than later. If you wait until you have every dime in hand to begin building, and this will take years to achieve, your church will miss out on opportunities to live out its vision for ministry in the community today, not to mention having to deal with rising costs of construction over the time it takes to gather all the funds.

Finding a Knowledgeable Church Funding Lender

The most important component to maximize the chances of getting a church funding package is to find a lender that understands churches. Not all traditional lenders will.

When you are a church leader, you know well that there are many different kinds of churches. Not just different denominations, but also churches in various stages of health and at different places in their life-cycle. These variations are not so obvious to many traditional lenders. That is why before you do all the work necessary to get loan approval, you should be sure the lender you are working with understands all the nuances.

If a lending institution thinks all churches are alike, it can be problematic.  For example, if a lender has read some national statistics about how some traditional denominations are losing members, they might think that all churches are dying and want to be hard-nosed about the terms for a loan. If they don’t understand the difference between a stagnant church and one that’s active and growing, you are not going to receive the most favorable of church funding packages.

On the other hand, by finding a lender who has helped various churches successfully fund a church building project, you are much more likely to receive favorable terms and develop an encouraging, supportive relationship for the duration of your church building project.

Find the Right Lender, then Prepare the Right Documentation

Once you’ve identified a traditional lender who understands the unique aspects of lending to churches, you can move on to preparing the documentation that will be needed to secure the funding. We’ve covered some of the preparation you’ll need to do with a funding checklist here.

In our free i3 webinar series, we talk about finance and other real church building issues that are facing leaders today. Please go to our home page now to register for our upcoming webinars.