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.