Churches typically use a calendar year even though their operating cycles run fall to summer. Therefore, changing your reporting year from calendar to fiscal makes more sense and offers many benefits. In this Pastorcast you will learn those benefits.

This month’s Speaker
Bill Sims, CPA

Salmon Sims Thomas & Associates

William H. Sims, CPA, is a vice president and director at Salmon Sims Thomas where he manages the Firm’s Nonprofit Organizations Division. Bill’s practice focus includes audit, tax and operational consulting for nonprofit organizations, employee benefit plans and closely held businesses. more…

Nilon Elliott, Senior Executive Consultant

The SON Group is led by Nilon Elliott who has spent 26 plus years as Senior Vice President with one of the most successful capital fundraising organizations in North America. Nilon has participated in over 900 Capital STEWARDSHIP and Offertory Enhancement campaigns; and he pioneered in the introduction of STEWARDSHIP for Catholic Parish fundraising.
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If your church has debt now or is considering debt for a future project you need to read this. This is a free call to discuss the current credit crisis and how it affects churches that currently have debt or are anticipating debt in the future. PastorCast is a monthly call that is recorded and archived at www.ThePastorCast.com.

It is sponsored by www.ChurchRealty.com and is provided free of charge. This month PastorCast is assembling a panel of Church Finance professionals and lenders to discuss the impact of this credit crunch on churches. Some projects that have been approved and partially funded are being stopped; no further funding. Some churches trying to renew their loans are not being renewed.

Although this is a serious situation it is not something to panic over but it is something to study so your church can be prepared for any situation. Please join us for this discussion and tell all your pastor and administrator friends as well.

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If your church has debt now or is considering debt for a future project you need to read this. This is a free call to discuss the current credit crisis and how it affects churches that currently have debt or are anticipating debt in the future. PastorCast is a monthly call that is recorded and archived at www.ThePastorCast.com.

It is sponsored by www.ChurchRealty.com and is provided free of charge. This month PastorCast is assembling a panel of Church Finance professionals and lenders to discuss the impact of this credit crunch on churches. Some projects that have been approved and partially funded are being stopped; no further funding. Some churches trying to renew their loans are not being renewed.

Although this is a serious situation it is not something to panic over but it is something to study so your church can be prepared for any situation. Please join us for this discussion and tell all your pastor and administrator friends as well.

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For most churches the purchase of a new church building is the largest financial transaction most of the members of the church have ever been involved in. As a result the process is one that can become intimidating to those charged with the responsibility to represent the congregation. It is a serious responsibility that in most cases will determine the location of your church for the next 30 - 40 years.

Let me ask you a question. If you had a problem with your foot, it just hurt all the time, what would you eventually do? You’d probably go to a doctor. Would you go to a dentist? No, why not? Aren’t dentists doctors? Of course they are, but they don’t specialize in feet do they. So, one of the first things I suggest to churches that have made the decision to build or buy an existing church building is to start building a team of church professionals, specialists that understand “CHURCH”, professionals that have been through this process many times. The big advantage is not that the professionals have all the answers, but they have many questions you may never think to ask yourself.

When I meet with the church leadership for the first time I almost always suggest that they get a church friendly lender on board in the very early stages. Here’s why. When you start shopping for land to build on or an existing church building you need to have a good understanding of what you can spend. By getting the banker on your team early you will save yourself a lot of time and put yourself in position to get the deals when they are available.

If you have a church building to sell, and you want to move in the next 24 - 36 months you need to get your building on the market now. Most churches don’t want to do this, they want to find a new church first, but you need to have your money ready first. To solve the problem of making your church homeless, agreements can be structured  that allow you to stay until you have a place to go.

Many churches head out to find a building as soon as they first consider a relocation, and then once they have found one try to figure out how they can pay for it. Sellers of both land and buildings usually will not wait long  for you to sell your existing church building and arrange a loan. You will be in position to get the best deals if you have all your money in hand, including the equity from your building and any loans you need.

Most lenders do not understand “Church”; they can’t look at you as a “personal account” so you fall under the commercial lending area. Most commercial concerns make a profit. Most churches don’t. Lenders almost never foreclose on churches (bad public relations to be the bank that closed the church) so they have to qualify churches differently than most other commercial accounts. In my experience you are light years ahead of the game by working with lenders that understand church, and there are many that do. As mentioned above, it’s best to deal with church professionals.

I suggest that you speak with several church friendly lenders to determine with whom you can gain a comfort level that you could work with them. This is a relationship that will be with you for a long time, it’s worth putting in some work to make the right choice.

Once you have made the choice and start through the application process you will be asked for all the normal information on your church, financial history, attendance records, cash positions, equity in building etc. The lenders will then qualify your church and give you a good idea of the amount they would be comfortable loaning your church. This allows you to shop with confidence and once you find a property that meets your needs you can offer with confidence and be able to close in a timely manner.

Typically most lenders will want to see that you have 25% - 35% equity in the new property. This is just a guide, although it is seldom less, it could be more. Many churches will run a capital campaign. Some will do it themselves, “in house”, others will use professional fund raising companies. In my experience the lenders prefer the professionals for two reasons. One, the professional campaign will usually yield 2 - 3 times the amount of money the “in house” campaign will and secondly the actual amount collected will be higher. Again it is a good idea to speak with a few professional companies to find a good fit for your church.

In summary, pray, plan every move well with the help of church professionals that have successfully completed church projects and can partner with you for a successful relocation for your church. Next time we will discuss some of the financial options available for churches today.

Dr. Randy Marsh is a native of Hillsboro, Texas. He holds a B.A. in Theology from Oklahoma Baptist University and three degrees from Southwestern Baptist Theological Seminary in Fort Worth, Texas. He is married to Tracy, who is a supportive and vital part of his ministry. Randy and Tracy have three children and two grandchildren. Randy served as a senior pastor and staff member of several Southern Baptist Churches for over 27 years including 19 years as Senior Pastor of Vista Ridge Baptist Church in Carrollton, Texas. Since 2003 Dr. Marsh has worked full time in the field of Ministry Finance. He currently works for ECCU (Evangelical Christian Credit Union) as the Ministry Development Officer for the Dallas / Fort Worth and Houston metro areas. He has extensive experience in all areas of church finance from both a Pastor and Banker’s perspective. Over the last five years, Dr. Marsh has worked with congregations all across the country providing financial planning services, developing customized budget and debt reduction plans and securing financing for building and expansion projects.

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Charles H. Major, President of Share Financial, Inc.

Share Financial Services is a 37 year-old investment banking firm that has assisted over 1,000 churches and non-profit organizations with financing that can provide up to 100% project funding and 25 year fixed rate financing. Financial products include construction loans, bridge loans, refinancing of existing loans, funding for capital stewardship programs, and bond financing.

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Whether you are a small, medium or large church, this call has valuable information for
any church facing the need for debt financing.

There are many good lenders out there and there is no one lender that can handle all situations, so we always suggest that you talk with several to find the best fit for you and your church.

In additon to lenders there are also many loan/mortgage brokers. In our history we
tended to shy away from loan brokers until we met Jack Dennison of Church Financial Services, Inc. Jack and his organization do a remarkable job of finding great deals for churches and as a result we are proud to have Church Financial Services, Inc. on our list of reccommended lenders.

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