In the lending arena, it seems that churches and schools are hard to fund.
Typically, unless there is some type of residence or hall that can be rented out, the income is not significant. Add to that a pastor who lives a life of service and typically spends more time taking care of their congregation than they do taking care of their finances.
But most of all, lenders and investors shy away from investing in churches and schools because they don’t want to be the bad guy who forecloses on a church if the borrower ends up not being able to make their payments.
Add to that, many churches are steepled and if you do have to foreclose, the use is so specific, you will find your new market so small, it is hard to re-sell.
So, here is a little advice for the administrative team of a church:
- Find a location that is a mixed use property, commercial and simple.
- Make sure there are additional streams of income available from renting your hall or residences out.
- Make sure the pastor or CEO of the non-profit organization takes care of their credit – there are a lot of great loan programs available if the credit is there.
- Lastly, hire a CPA to do your taxes and your books to ensure that your church, which really is a business, reflects well in your records.
We know how hard you work to help your congregation. We want to help you – we really do.
We do fund non-steepled churches and we will work with the pastor and the organization to make sure we can help you into a conventional loan after the term of our loan – typically 2-3 years.
We fund in Southern California up to 60% LTV, $50K-$900K.
Contact us for your lending needs.