5 Effective Tips to Get A Church Loan - Griffin Church Loans

5 Effective Tips to Get A Church Loan


From financing church building projects that allow you to expand and house more worshippers to church refinance loans that lower the interest rate of currents loans, there are several reasons why you would want to apply for a loan for your church.

But just like the Scripture’s warnings about borrowing, we caution you against borrowing more than can be afforded.

So, how can you apply for the right church loan?

Let us explore what are the best borrowing conditions for your church, and the mistakes to avoid.

With our 5 Quick Tips For Church Loans, acquisition and even repayment of a church loan will be as easy on the hands as a carol on the ears.

5 Quick Tips For Church Loans | Understanding A Church Loan

As someone who has received a mortgage on their property, you might be tempted to think that a loan for a house is same as the loan for God’s house.

However, it is not so. Banks do not understand morality and virtue; they understand profit and loss.

Churches are considered commercial properties by banks. Consequently, a commercial loan is what a church needs to satisfy its borrowing needs. 

With a basic understanding of what loans are relevant for your church, let us unearth more methods to leverage the power of loans to bring blessing to all worshippers.

1.   Smart Planning For A Smart Loan

Not every loan agreement is built the same. Thus, you should choose a loan that meets the requirements of your church while understanding that churches are not a preferred borrowing customer of traditional banks. 

Here are a few things to help you along your path to a smart church loan:

  • First, you must clearly assess what needs your church has. What are some of the things the church is trying to accomplish? What are the costs associated?  What are the potential pitfalls of the project and what can you do to mitigate those risks?
  • Secondly, you must plan the project and who will be in charge of what parts.
  • The best way to build a basic plan is to bring everyone in the church on the same page regarding potential borrowing and the best use of the money.  Building support among parishioners can help to raise funds and reduce the amount of money needed to borrow.
  • This should be followed by professional consultation with experts.  For instance, if your church is looking to construct a building then an architect and contractor should be consulted.

2. Putting Costs Before Needs

One of the most common mistakes that churches make is falling into a spending trap.

As soon as churches decide to borrow for renovation or any other purpose, there is often an instinctive push to spend as much as possible.

This is not the best way to handle church financing.  It is often better to be frugal and keep the loan as small as is reasonable to accomplish what is necessary.  The number one thing to remember is whatever the church borrows, it must repay with interest. 

We believe our advice will be pale in comparison to the guidance the Holy Scripture offers.

Luke 14:28-30 tells of a tower being built but not finished because the planning and understanding of the costs was incomplete.  Since the man failed to budget and calculate the costs, his project remained unfinished.

Drawing inspiration from Luke 14:28-30 is essential.

As you begin to take a loan, do not take more than you can afford.

Second, do not try to control spending by cutting corners. For example, hiring an architect in the beginning and looking for bids might seem like unnecessary spending. However, these are the most important stages as they give you all the awareness and information required for the latter stages.

Similarly, involve all the stakeholders, including lenders, church managers, pastors, ministry offices, and experts. So, a comprehensive plan is drawn where experts can explain the church’s need for a loan, and the lenders will have a clearer picture of what kind of loan they should offer.

3.   Prioritizing Affordability and Functionality

This might sound paradoxical. Since we strongly advise against cutting corners. However, it is not a contradiction to our previous statements, and you will soon know why.

You might think, “Surely, we want a church that looks better, has more space, offers more amenities, and must have a good air-conditioning system and a dedicated choir space.”

This is just where we would ask you to make sure your plans meet your budget.

By taking this what jobs need to be done approach, you may be able to find more affordable, alternative solutions to some of the necessary items.

You can choose economical interior items to do the same job as an expensive interior add-on.

  • Vinyl baseboards are as functional and durable as wooden baseboards.
  • Energy-efficient methods and fixtures may save money over the long term.
  • Stained concrete instead of tiles may help to save money.

All these methods do practically the same job as their expensive counterpart solutions, but these solutions also offer an added advantage to getting a loan.

Lenders consider the past, current, and expected future earnings of an organization before granting a loan. When you are smart with your spending, which includes daily spending too, a lender will look favorably towards you – that can help you get a good deal that offers:

  • A good loan amount.
  • Reduced interest rate.
  • Easier payback timeline

4.   Looking Ahead at The Bigger Picture

Whatever loan you decide to take, you must remember one principle: The church should be able to make the loan payment comfortably from general tithes and offerings.

If the church relies on special offerings, one-time donations or other non-regular offerings then it potentially places it in the position of needing those special donations to continue to make the loan payments.

5.   Embracing Refinancing

This might be one of the best tips you ever get but remember that you heard it first here!

Let’s discuss church financing.

Refinancing is the art of renegotiating the terms of your borrowed loans in an attempt to get a sweeter deal with better loans terms and a lower interest rate. 

Unlike banks that might not always conduct actions that are in the church’s favor, you can find Ministry-based companies that offer financing options at competitive rates. If you are lucky, you might find rates that are even below the market interest rates.

Church Loan Demystified!

Getting a church loan on favorable terms is difficult – there’s no doubt about it.

But with our tips and tricks and God’s help, getting church financing will be like a walk in a park.

As your church gets efficient at spending and stable with collecting funds – both of which are tremendously helpful to make the church financially strong, more active in the community, and smart at choosing future loans.

If a debt still gets too much, capital fundraising campaigns and one-day fundraising pushes can do wonders to collect the amount needed to pay off the loans sooner.

So, when are you applying for a church loan?

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