| Loan Basics
We believe long-term assets
should utilize long-term
financing.
Since
most commercial lending institutions rarely offer fixed-rate loans for
longer than five (5) years, bond financing is and has been the only
reliable means for obtaining true long-term financing! With few
exceptions, bond financing is the only method
in America that offers a fixed interest rate and fixed monthly payment
for the entire term of your loan!
We believe churches should not
gamble on interest
rate fluctuations.
Church budgets contain two
primary elements; fixed-costs and variable-costs.
The better a church defines its fixed-costs, the easier it is to
identify the amount of funds available to pay for existing and new
ministries/programs. A church’s mortgage payment is an
important element in fixed-costs. Whenever a church uses a short-term
loan to finance its mortgage, it is gambling
that interest rates will not change by the time the five year mortgage
loan must be renewed.
We believe ministries,
NOT buildings, are the key to church
growth
The Hollywood movie
‘Field
of Dreams’ was based upon the
statement,
“Build it and they will come”. When analyzing
church growth, that simply isn’t true. Church buildings are
important, but without your church’s life-changing
ministries, buildings are just buildings. Many of our church clients
were holding 3 or 4 Sunday morning church services prior to expanding
their facilities!
We believe short-term
and intermediate-term
loans are necessary.
“Purpose”
and “planning” are important considerations for the
proper use of these types of loans. Important questions you
should ask are:
- Will
this loan fulfill our intended purpose?
- Have we made adequate provision to repay or refinance the
loan whenever it matures?
- In what ways could this loan jeopardize our future financial
health that we should consider today?
- Which financing organization will provide analyses and
counsel to help us make a good decision?
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