Church Commercial Loan | How to Get a Church Commercial Loan
Few ministries can purchase a church as a cash-only transaction. In general, the church needs to find financing, and even though it is a religious institution the term for this type of financing is known as a “church commercial loan.”
For the purposes of lending, a church commercial loan is essentially the same as a traditional commercial loan that a business or investor may purchase on a commercial property. Indeed, while there are some lenders that specialize in churches, most have the exact same qualifications and interest rates that they would have if they financed other forms of property.
What it Takes to Get a Church Loan
For ministries looking to purchase a church, the most important thing to do is open yourself up to lending possibilities. Do not necessarily use only those that provide church commercial loans – many of them target churches as a niche, not necessarily because they offer better rates to religious institutions.
That means that you need to shop around for lenders, and as you shop around you’ll need to also keep the following information in mind:
- Proving Worth – You will need to try your best to prove both a history of financial profitability and the future likelihood of drawing in enough revenue to cover your debt. You will likely need to prove that you already have a congregation and that the revenue generated from that congregation – along with all other church expenses – is enough to cover costs on the property.
- Deciding Living Arrangements – Should anyone in the ministry live on the property, you may be eligible for a larger loan or a better rate.
- Providing Your Church’s Values – It’s not enough to be a religious institution. You’ll also need to make sure that you show lenders that you are a church that will draw in paying clientele. A small church that is only for a very small sect of Christianity, for example, may not be as easy for a lender to fund as a large church with a growing congregation.
But perhaps the most important thing to remember is that a church commercial loan is still a loan like any other, and because churches often struggle to prove the amount of “income” they generate, it’s very hard for lenders to approve of a low interest loan. Even those that specialize in churches are often charging a higher interest than other forms of commercial property, so shopping around is crucial.
CRE Lender and Church Commercial Loan Financing
It takes some work finding lenders that will finance church loans, and it’s even harder to shop around for the best price and make sure that lenders are not taking advantage of you.
The best strategy is to get help with your church purchase. At CRE Lender, you’re more than another church. You’re an organization that needs help – an organization that needs the best rate. We specialize in linking churches – and commercial businesses – to lenders that are willing to take on their loan and offer the best rate possible.
Sign up with CRE Lender today to learn more about our church lending help and how to get customizable and affordable options for your borrowing needs.
[salesforce form=”2″]