Borrowing Basics

 

Long-term assets should employ long-term financing. 

 

Most conventional lending institutions rarely offer churches fixed-rate loans for longer than five (5) years even though the payment may be based upon a 20 to 25 year amortization.  However, Bond Financing is and remains the primary means for churches to obtain true, long-term financing!  If your church intends to finance its mortgage or construction project for the long term, we believe locking in a fixed interest rate and fixed payment for the ENTIRE life of your loan is the wisest and best way to go!

 

Do not gamble on interest rate fluctuations. 

 

ANY budget contains 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 or programs.  A church's mortgage payment is a major and very important element in defining its fixed costs. Whenever a church uses a short-term loan (typically called a "conventional loan") to finance its long-term mortgage, it is gambling that its payment will not change whenever the conventional loan comes up for renewal.

 

 

Ministries are the key to church growth, NOT buildings. 

 

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!

 

 

Borrower Beware! 

 

Never, never enter into any loan arrangement before checking to see if there is a "Prepayment Penalty" clause in the loan agreement!  Bond financing through Great Nation Investment Corporation NEVER includes a prepayment penalty.

 

 

Finally

 

“After determining the optimum method of financing for your project, select a finance company who will be more than just a lender, but who will offer you analyses and counsel for achieving your goals!