Church Financing Programs: Everything You Need to Know

Church Financing Programs: Everything You Need to Know

Most people realize that churches are tax-exempt for almost all types of taxes. We sometimes hear how this is unfair and churches should have to pay taxes like for-profit entities, but these same people do not realize the good that most churches do within their communities and around the world.  Churches use the money they raise for all sorts of social programs and of course, to pay their bills. Furthermore, it’s also becoming clearer that their tax-exempt status doesn’t mean that churches have the opportunity to stack up loads of cash. Instead, religious institutions still have financial needs and problems like business organizations.

When such issues arise, churches must rely on church financing programs. Like traditional businesses, a church can get loans and other credit facilities from financial institutions. However, church financing isn’t yet mainstream.

Many lenders don’t have products for churches. Moreover, there’s scarce information on church financing programs, even among professionals. If you have any questions on church financing, read on. This article reveals all you need to know on the subject.

Everything You Need to Know About Church Financing Solutions

Suppose your church needs funds. Then, there are several options and sources for the church’s financing. Notably, churches have access to some loan programs that for-profit businesses do not such as loans without personal guarantees.

Therefore, choosing a church financing program depends on several factors. For example, you’ll have to consider your church’s needs. Your capacity and estimated timeframe for repayment is also vital.

Below, we explain all you need to know about church financing programs.

Church Loans

Church loans are the most popular church financing program. A church can get a loan in the same manner as companies and other profit-based institutions. Several lenders and other financial institutions are lending millions of dollars in loans to churches.

These loans aren’t available only to churches. Instead, any religious institution can access a loan, including Jewish and Muslim organizations.

Church loans are generally divided into two. They are:

  • Secure loans (mortgages), and
  • Unsecured loans.


Mortgages usually involve the church taking and securing a loan with its properties or land. Therefore, the property’s value often determines the money the church can borrow from the lender. Suppose the church then defaults on the repayment agreement.

Then, the lender can foreclose and sell the property. Church mortgages can be long-term or short-term. A long-term mortgage allows the church to spread the repayment over many years.

So, the church has sufficient time to raise the money. However, the total amount your church will repay will far exceed the original sum if you consider the interest rate. On the other hand, short-term loans are self-explanatory.

The church must repay the loan and interest within a shorter period. Thus, you may have months or even a few years to repay the mortgage. Short-term mortgage loans are ideal for smaller church projects like small renovation projects.

Unsecured Church Loans

Unsecured mortgages don’t require any collateral. So, you don’t need to put your land or buildings on the line. However, nobody will grant you significant sums of money without any security.

Thus, unsecured church loans usually involve little sums of money. As a result, you will only be able to execute minor projects with unsecured loans. However, the money may be so little compared to your church income that the lender has no problems believing you can repay the loan.

Applying for a Church Loan

Getting a church loan is often a complex process. Therefore, loans aren’t ideal if you need immediate funds. The loan application process usually starts with an inquiry.

Church representatives will approach lenders with questions at this stage. Essentially, the goal is to know if the lender has loan options for churches. After that, you’ll likely have to speak to the lender’s church loan consultant.

Such a consultant is necessary because church loans are a unique form of financing. So, this initial interaction will involve questions on the following:

  • Description of the size and impact of your ministry
  • Plans and purposes for the loan
  • Explanations of how the loan fits into the church’s mission and vision
  • Current membership of the church, especially weekly attendance
  • Existence and value of church properties
  • Current financial situation

Learning About the Church Financing Institution

This initial meeting shouldn’t be all about your church. Instead, it’ll be best to exploit the opportunity to learn more about the financial institution. Therefore, your church representatives can ask crucial questions such as:

  • How many churches has the lender granted loans to?
  • The vision and mission of the lender
  • How the lender distinguishes between commercial and church loans
  • Repayment options available to the lender’s borrowers
  • History of the institution’s relationship with church borrowers

The answers to these questions can help you ensure you go with the lender that is right for your church. Churches are different from commercial companies. There’s so much at stake, so making an excellent choice is vital.

Church Loan Application Documents

Before getting a church loan, you’ll have to submit several documents to the lender. These documents help the lender decide your church’s suitability for the loan. Usually, the concern is whether you can repay the loan within their defined period.

Relevant documents in the church loan application process include:

  • Three years of financial statements
  • Church membership records
  • Church leadership data
  • Resolution authorizing the church leaders to take out the loan
  • Estimated budget for the proposed project
  • Church constitution and bylaws
  • Title documents of the property used as collateral
  • Property survey and valuation documents
  • Church balance sheet
  • Data on church-giving units
  • Brief church history
  • Biography of church leaders

Note that the necessary documents differ across the different lenders. Therefore, you may not require some documents listed above. You may also need to submit other materials that aren’t on this list.

Church Line of Credit

A church loan may be unnecessary if you can easily get a line of credit. Church lines of credit are a type of temporary loan solution. It’s a continuous and ongoing source of money available on demand.

Church lines of credit allow your church to borrow a pre-set amount. This sum of money is always accessible to the church for any purpose. In addition, lines of credit are so flexible that you don’t have to withdraw all the money at once.

Instead, you can access the funds for specific needs over a long period. Furthermore, you only have to pay interest on any sum you withdraw from the line of credit. You can also quickly repay any money you withdraw and still have the entire fund available for your church’s needs.

Church lines of credit function like credit cards. Lines of credit are useful for frequent one-time purchases and recurring expenditures. So, you can settle for a church line of credit rather than take out a loan to cover salary shortfalls. You’ll have to pay administrative fees when you access the line of credit, though.

Church Grants

Grants are great programs for churches to research. A grant provides the church or religious body with a fixed amount of money if they meet certain criteria. Usually, grantors set up these funds to provide crucial facilities in communities and for the public interest.

So, if you fit this provision, you can apply for and get a grant for your church needs. Furthermore, churches don’t have to repay grants.

There are two major types of grants:

  • Federal government grants for non-profits
  • Non-federal government grants for non-profits

The federal government has several grant opportunities for churches and other religious institutions. Similarly, different organizations also offer grants to churches. Governments and other institutions recognize churches’ contribution and influence on the community and the country.

So, these grants are essentially economic stimulus for the country. There are also subdivisions of these grant types, especially federal government grants for non-profits.

Federal Government Grants

There are two broad categories of federal government grants for non-profit organizations. They are:

  • Categorical grants
  • Block grants

Categorical grants state the definite purposes for which you can apply the grants you get. For example, there could be grants for combating drug abuse. So, churches with outreach programs for drug addicts can qualify for such grants.

Conversely, block grants have wider applications and goals. There’s no specified or definite goal for the money. Instead, you could have a grant for crime reduction and control.

So, a church can access this grant type for any project that can reduce crime in the community. You can find the list of projects the US government supports with grants in the Catalog of Federal Domestic Assistance (CFDA).

Non-Federal Government Grants

Institutions that offer non-federal government grants include:

  • State governments
  • Local governments
  • Companies and corporate organizations
  • Community structures
  • Private foundations
  • Other non-governmental and non-profit organizations

Non-federal grants can also be categorical or block grants. You can check for these non-federal government grants here.

Eligibility Requirements for Church Grants

Like loans, there are also eligibility requirements for grants to churches and other non-profits. So, it’s best to check whether you’re eligible for a grant before applying. Grant application procedures are often tedious.

This is to eliminate fraudulent applicants from the process. Therefore, it’ll be a waste of time to go through this long procedure only to learn that you didn’t meet the eligibility criteria. But you don’t have to worry since there are tons of grants. So, you’ll most likely qualify to access one.

Debt Refinancing

One of the most popular church financing program requests is for refinances. We are happy to see churches refinancing their loans before interest rates climb.

Refinancing follows an existing church loan. It’s the replacement of one debt obligation with another under different terms. For example, you can refinance to get better repayment terms, including interest rate and length.

Refinancing mortgages or other loans becomes necessary if you cannot meet your current repayment obligations. Furthermore, you can explore debt refinancing where interest rates fall below the amount you previously agreed to with the financial institution. So, you may pay less than you would have paid under the earlier arrangement.

Refinancing replaces the earlier loan agreement you had with a lender. However, you must first submit your refinancing request to the current or new lender to refinance your church loan. Then, you’ll have to enter into a new loan contract.

There are different types of loan refinancing, including:

Consolidation Refinancing

Consolidation refinancing involves taking out a new loan to repay other loans you have, whether they are with the same lender or multiple lenders.  After that, you’ll pay off these older loans with the new money you borrowed. So now, you merely have to repay the second loan with lower interest rates than the average interest rate across the consolidated loans.

Rate-and-Term Refinancing

This is the simplest form of loan refinancing. Here, your church gets a new loan agreement at a lower interest rate. Then, you use this second loan to fulfill your obligations under the first loan arrangement.

Other Vital Details on Church Loan Refinancing

Refinancing isn’t only for when your church needs more time or resources to repay an earlier loan. Instead, suppose you run into some extra cash and want to repay the loan faster. Then, you can refinance for an earlier repayment date rather than having extended loan repayments.

It is noteworthy that refinancing can have expenses associated with it, so you should confirm that the refinance will save the church money in the long run before you start the process.

At Griffith Church Loans, we aim to help every church that we can by placing them in a better financial position. We have church financing programs for almost every loan scenario. We work with churches of all sizes. This also includes churches with good or bad credit.

What Can Churches Do with the Money Gotten from Church Financing Programs?

Churches can achieve much from a church financing program. They can use the money they get for several purposes, including:

  • New building construction
  • Renovations of existing structures
  • Expanding the church venue
  • Refinancing mortgages
  • Improving and expanding the reach and effect of church outreaches
  • Improving the accessibility of existing church structures for certain members, such as disabled persons
  • Purchasing church equipment
  • Decorating the church venue

These different purposes often determine the amount of money you need and the right financial institution to approach.

Tips for Accessing Church Financing Programs

With church financing, many applicants are seeking solutions to their money problems. Therefore, you need all the tips you can get to apply for and obtain the cash your church needs. Unfortunately, some applicants make mistakes that rob them of the chance to secure their needed funds.

If you avoid these mistakes, it’ll be easier to get church loans and other sources of financing. So, below are our top five tips for getting church financing.

Professional Services Beat Volunteer Work

Non-profit organizations like churches thrive on volunteers. Church members volunteer their funds, time, skills, and services. Thus, there’s the temptation to approach the church financing application process with volunteers.

Volunteers can work on your:

  • Financial statements
  • Application letter
  • Church records
  • Necessary reports
  • Financial and legal due diligence

However, it’s best to use professionals for these responsibilities. Volunteers will not invest as much time and effort as paid experts. Therefore, your application may be fraught with mistakes.

Indeed, a church that lacks sufficient funding may be unable to pay professionals. However, the risk of losing the fund injection is greater than any monetary sacrifice the church must make. It’s thus best to work with the following:

  • Lawyers
  • Lenders
  • Accountants
  • Property evaluators
  • Surveyors

Disclose All Relevant Information

Many lenders and other financial institutions are still wary of church financing programs. Therefore, your honesty can significantly improve your chances of getting vital church financing. Churches often have a reputation for honesty and transparent dealings, so this requirement shouldn’t be challenging.

Therefore, it’ll help to ensure that you supply the lender with all vital pieces of information. But on the other hand, some data may negatively affect your chances of getting church financing. Thus, there’ll be a temptation to hide or under-report such facts.

However, doing this will hurt your chances of getting church financing even more. If the dishonesty is noticed, it may cast doubts on other documents and processes. Lenders are already wary of church financing programs. Therefore, it’ll be unwise to make them more skeptical.

Consider Your Options Carefully

From the explanations above, it’s clear that churches can choose from several financing programs. Furthermore, each finance solution has its advantages and disadvantages. In addition, your church’s needs often determine what financing program you should pursue.

So, it’s vital to carefully consider which church financing solution best solves your church’s needs. Sometimes, you may need to speak to a professional. They can help you make an excellent decision.

These professionals don’t just focus on scoring new businesses and closing deals. Instead, they want to help you achieve your goals and visions. Therefore, they will walk you through different church financing programs and help you pick the most suitable option.

Know When You Don’t Need External Church Funding

Many churches fall into the trap of not finding out whether church financing is a smart or necessary move before applying. For example, some churches experiencing slow growth apply for church loans. The idea is that if they build larger buildings, then more people will come.

However, this isn’t a reliable metric for predicting church growth. For example, you can have the largest and most beautiful structure, and your church still wouldn’t increase in membership. Therefore, suppose there isn’t any independent prediction of your church growing significantly. Then, a financial institution will most likely deny your loan application.

Have an Alternative Repayment Plan

Financial institutions will not grant you church financing facilities if you cannot repay the money. Many churches repay their loans from their members’ giving — tithes and offerings. However, several things can stop this repayment avenue.

For example, suppose your major church givers relocate. Then, your church may run into a financial crisis. Therefore, having an alternative source of repaying the financial intervention will increase your chances of getting a loan or other facility.

A typical example would be running a dedicated fundraising campaign to pay off the debt. For example, you could dedicate an evening service to raising funds from the members and the wider community. Similarly, you can also explore the publishing of spiritual books.

All these steps can earn the church extra funds. Consequently, a lender will be less scared of your not repaying the loan. They’ll know that even if tithes and offerings drop, you have alternative sources of repaying the principal and interest. You’ll thus be more likely to receive the church financing.

How Much Can a Church Get from Church Financing Programs?

Suppose your church is considering church financing solutions. Then, you may have a figure in mind, usually the amount that will take care of your problems.

However, lenders are not bound to give you any amount of money you want. Instead, they consider the church’s financial status before granting a loan or other credit facility. So, for example, you’ll most likely get your gross tithes and offerings times four.

The relevant amount is the value of your members’ generosity before expenses. Therefore, the higher your offerings and tithes, the more money you may be able to borrow from a lender. Some financial institution go as high as six times your gross tithes and offerings.

The calculation is slightly different for grants, though. Government or private charity grants often have a definite figure. For example, the federal government may want to give churches running community outreaches $100,000.

In such cases, all religious bodies that apply for the grant will only get $100,000. But if you want more money, you can apply for multiple grants. Similarly, the value of your collateral determines how much your church gets in a mortgage.

Some other factors can affect how much you get from a church’s financial program. They include:

  • Church Credit history
  • How long your church has been in existence
  • The financial institution you approach


Sourcing church financing isn’t as easy as it is for business organizations. Indeed, there are many church financing programs. Unfortunately, however, there’s scant information on such financing solutions.

Many lenders and other financial institutions aren’t equipped to handle church financing programs. Therefore, this guide is an excellent resource for knowing all there is to church financing. So, does your church require financing?

Is it an urgent need, or do you have sufficient time? Whatever the case, we’d be happy to help you achieve your church goals. We can also help you explore the church financing solutions suitable for your church. It all starts with a call to Griffin Church Loans at 800-710-6762.

Editor’s Note:  The post was originally published on Jan 18, 2018 and has been completely revamped and updated.

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