How Much Will My Church Qualify for When We Apply for Financing? - Griffin

How Much Will My Church Qualify for When We Apply for Financing?

If you check around, you’ll see that church loans are less popular than other loan types. Many lenders that fund home loans and business loans, do not make loans to religious organizations. Even if your church finally gets a loan, it may not be the amount it needs to accomplish its goals.

So, you and your church leaders may want to know how much they can get from church loan lenders before applying for a loan. Unfortunately, the church loan application process is tedious and time-consuming. It’ll thus be unfair to go through such rigor and not get all the money your church needs.

Applying to another church loan lender will involve undergoing this challenging process twice. Therefore, knowing how much to expect from church lenders is vital. In this article, we’ll explain this. You’ll also learn how to improve your chances of getting significant sums for church loans.

Let’s begin.

What Is a Church Loan?

We’ll explain how much you can get from a church loan lender. However, it’ll be best first to learn what a church loan is. Church loans are all loans given to churches or other religious institutions in the name of the organization.

You can also call these house of worship loans or faith-based loans. So, not only Christian denominations have access to church loans. Instead, all religious institutions can access some form of financing from lenders.

It is vital to know Church loan specialists. These financial institutions provide funding to churches. Essentially, you can approach any institution qualified to provide credit facilities for church loans. However, it’s always best to use financial institutions with a significant history of lending to churches. Church financing is a unique area that requires special steps and considerations. Thus, a lender with experience will best serve your needs.

church loan lenders

How Much Can My Church borrow from Church Loan Lenders?

We know you’d love to hear a dollar amount you can secure as a church loan from a lender. But things don’t work that way. So, there’s no definite amount of money that you can get if your church applies for a church loan.

Instead, several factors affect how much money a financial institution can loan to a church. Understanding all these details is important. Once you know them, you can estimate the amount you can get as a church loan. It could be from tens to hundreds of thousands of dollars.

So, let’s discuss what determines how much money you can get from a church loan lender.

Your Church Income

Yes, your church income primarily determines how much a bank or financial institution will willingly lend you. This is because your income gives the lender an idea of your ability to repay the loan. When we talk about your income, we mean your:

  • Tithes,
  • Offerings,
  • Free-will donations, and
  • Money from other endeavors, such as rental income

So, generally, if your church has a significant income, you can get a lot of money from a lender. But conversely, lower church incomes also get only small sums of money. Therefore keeping an accurate and detailed record of your church’s finances is important.

Church loan lenders generally loan between 3 and 6 times your church income. So, suppose you’re making about $100,000 annually. Then, you can get anywhere from $300,000 to $600,000 from a church loan lender.

Also, church loan lenders need to know that your income will stay the same or improve over time. This is why they ask for financial statements for the last three years. But in addition, they can ask for your membership records.

These records will help them estimate your church’s growth in the coming years. This is vital because the more your church grows, the more people can contribute to your finances.

The Value of Your Church Project

You cannot just borrow money because you want to. Instead, churches usually have definite needs that push them to seek church loan lenders. Furthermore, you must know the specific amount needed to meet your Church’s need before applying for a loan.

Some of the reasons churches take loans include the following:

The project you’re borrowing for thus determines how much money you’ll ask the lender for. For example, imagine you want to build a new church auditorium that costs $100,000. Then, this is the exact sum you’ll require as a church loan.

But a church loan lender can add more money to your required sum. For instance, you can borrow money to furnish the auditorium in the church building scenario above. The loan can also include money for buying musical instruments to fit the building’s size.

Market Value of Your Loan Collateral

Church loans are normally mortgages. Mortgages require you to put up some church property, like buildings or land, as collateral. So, if you don’t repay your loan, the financial institution can sell the church property and recover its capital.

The loan amount cannot usually exceed 80% of the value of the property being used as collateral for the loan.  A lender cannot give you a loan exceeding your property’s current market value. For instance, suppose your church has a sanctuary worth $500,000, the most a church will usually be able to borrow against this is 80%.  This is not the case when doing a construction loan, then the final value of the property after construction is usually used.

The lender must make sure that if they must take the property back, that they can sell it for at least what is owed on the property.  But there’s another option. You can use multiple properties to secure a church loan. In some cases, you may also use private property to get a church loan if the property owner is a party to the loan agreement. These measures go a long way to ensure you get the money you need for your church.

Your Sunk Costs

Lenders also consider capital injection when giving church loans. Capital injection refers to the amount of money your church is contributing or has already contributed to the project they’re borrowing for. The rationale is simple too. A church loan lender wants to see some form of financial commitment from you.

Therefore, suppose you’ve sunk large sums of money into a project before applying for a loan. Then, it’ll be more unlikely that you’ll abandon the project halfway. Thus, you’ll enjoy the benefit of the project and be motivated to repay the loan.

So, the more money you’ve invested in a project, the more capital you can get from a church loan lender. Moreover, high sunk costs can indicate that your church has a sizable income. But suppose your church is small, and you invested all that money over a long period.

Then, it also raises the presumption that you can follow through on long-term commitments. Whatever the case, you can get a larger loan amount from a bank. You have a lot to lose if the project fails, so you and the bank share the risk.

Ability to Repay the Loan

Church lenders aren’t charity organizations. So, they want to get back the money they lend you with the interest. Therefore, your ability to repay the loan also determines how much you can get from the lender.

You must show that you can afford the repayment and how long it’ll take you to achieve the payoff. For example, if you agree on $10,000 per month, including interest, you must show the bank that you’ll be getting that much money monthly plus enough to continue running the organization. This is another area where your church income becomes relevant.

Understanding this can help you negotiate better loan repayment terms. For example, you can ask for longer repayment periods to reduce the monthly payment to make it more affordable.

Support From Church Members

Church loans aren’t common practice, meaning churches don’t take out loans daily. Instead, they only take such loans for special occasions and projects. Therefore, church loan lenders must confirm the church members’ support for the loan arrangement.

The financial institution will not assume that the members support the loan application. Instead, they’ll want to see the members’ direct involvement that shows they’re behind the leadership on the loan application. This is necessary because if your church’s income can no longer service the loan, you’ll need your members to stand together and make extra contributions.

So, a lender will want to know that your members can make such sacrifices for the project and church loan. One way of judging such a possibility is by looking at the results of your fundraising campaigns. Many churches embark on such campaigns to raise some money before taking loans.

Therefore, suppose you got significant sums of money from your campaign. Then, it’ll convince the lender that if it comes down to it, your church members can step in and cover the costs of the loan. In such an instance, the financial institution will be more willing to loan you higher sums of money.

How Can My Church Get the Church Loan Amount We Want?

Like most people and organizations, you probably have lofty expectations when you apply for a church loan. You hope to get the money you need to take care of your church needs. Every borrower thinks this way, but there are vital steps to take to make this your loan a reality.

While it’s not magic, there are tips for getting all the money you need in a church loan application. In addition, these steps can help you get larger sums of money from a lender. If you’ll love to know how you can get all the money you want from a church loan lender, read on.

Maintain a Healthy Credit History

You thought credit ratings, scores, and history were only for individual borrowers. Unfortunately, you couldn’t be more wrong. The reality is that almost every person and organization that handles financial transactions has a credit history.

Therefore, this factor is vital in determining how much you can get from church loan lenders. In addition, a healthy credit history means that your church will most likely repay the loan. Thus, a financial institution has less to fear when considering your loan application.

The trick is to learn how to boost your church’s credit score. We shared tips on how to do this below:

  • Evaluate your church credit reports and fix errors that can hurt your credit score
  • Pay off existing church debts
  • Avoid dealing with multiple lenders at the same time
  • Collect and evaluate your credit score often to quickly determine if your church credit history turns negatively

Great credit scores aren’t just good for getting loans, they can also help you negotiate a lower interest rate on your church loan. So, you get all the money you want and at a good interest rate. 

Consider Getting a Guarantor if Needed

If your church is not strong enough to qualify for a loan on its own, you may want to consider asking church members if they will guarantee the loan. 

You know churches aren’t just places of worship, they are an important part of our community where people go for worship and fellowship.  Therefore, lenders are usually skeptical about foreclosing on churches. This means that lenders will not readily sell a church building to recover a loan as it would for ordinary borrowers. Moreover, a stigma follows banks for foreclosing on homes – people see them as ruining families. This stigma is worse with church buildings. So, banks are very reluctant to give out loans to churches.

Sadly, your church may need much more than the bank is offering, and a guarantor is your best option in such a case. If you apply with a guarantor, you may get a larger money, as the bank can hold the guarantor liable if you fail to repay the money.

Choose Your Church Loan Lender Deliberately

After everything, how much you get from a church loan lender depends on the lender. A bank that doesn’t like giving out church loans may not approve any amount of money for your church.

However, the case will be different for established church loan lenders. In addition, specialist lenders, those who always lend to churches, will be more open to granting large church loans. So, you must carefully and deliberately choose your lender.

Ensure you thoroughly research the available lenders before sending out applications. You must not go with the first financial institution that comes to your mind. Instead, compare at least three different lenders before deciding.


It is evident that getting church loans is challenging. Also, finding a willing church loan lender is one thing, while getting the exact amount of money you need is another issue.

Thankfully, we shared some tips to help you get the money you need, one of which is increasing your creditworthiness. The tips we’ve discussed above can help you meet your church loan expectations. If you want more information on how to get church loans and increase your church creditworthiness, we have helpful information on our blog. You can also contact us if you have questions about the church loan process, as each case is unique. We have the solution to your church loan problems.

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