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For most churches the purchase of a new church building is the largest financial transaction most of the members of the church have ever been involved in. As a result the process is one that can become intimidating to those charged with the responsibility to represent the congregation. It is a serious responsibility that in most cases will determine the location of your church for the next 30 - 40 years.

Let me ask you a question. If you had a problem with your foot, it just hurt all the time, what would you eventually do? You’d probably go to a doctor. Would you go to a dentist? No, why not? Aren’t dentists doctors? Of course they are, but they don’t specialize in feet do they. So, one of the first things I suggest to churches that have made the decision to build or buy an existing church building is to start building a team of church professionals, specialists that understand “CHURCH”, professionals that have been through this process many times. The big advantage is not that the professionals have all the answers, but they have many questions you may never think to ask yourself.

In my initial meeting with church leaders I usually suggest that they find a church friendly lender in the very early stages of the process. It is crucial that you have a good understanding of your financial limits so you can shop accordingly. If the banker is on your team, ready to go, you put your church in a much better position to catch the great deals.

If you are planning to move in the next 24 - 36 months and you need to sell your current location in order to move, then you really need to put your building on market now. Most churches shy away of this idea because they want to find a building to buy first. But even if you find the perfect building, it will probably be gone by the time you sell your building so you can pay for the new one. Many times churches worry about selling their building and not finding a new one, leaving them homeless, but you can structure an agreement that will protect you from this situation.

The first step that many churches take in the relocation process is to find a building that they want and then they search for financing so that they can pay for it. The problem is that most of the time sellers or both land and buildings are not usually willing to wait for you to sell your building and put together a loan. In order to put yourself in the best position to get the best deal is to get you money in hand, including equity from your current building and any loans needed.

Most lenders do not understand “Church”; they can’t look at you as a “personal account” so you fall under the commercial lending area. Most commercial concerns make a profit. Most churches don’t. Lenders almost never foreclose on churches (bad public relations to be the bank that closed the church) so they have to qualify churches differently than most other commercial accounts. In my experience you are light years ahead of the game by working with lenders that understand church, and there are many that do. As mentioned above, it’s best to deal with church professionals.

As you choose a lender you will be best served by talking to several and finding the right fit between you and the lender. This is normally a long relationship you are building so do so carefully.

During the application process you will be asked for all the normal information on your church such as, financial history, attendance records, cash positions, equity etc. The lenders use this information to qualify you for a loan, and this will give you a good idea about how much you borrow. With this number you can shop for church buildings with confidence and find the property that meets you needs and have a good chance to close in a timely manner.

Typically most lenders will want to see that you have 25% - 35% equity in the new property. This is just a guide, although it is seldom less, it could be more. Many churches will run a capital campaign. Some will do it themselves, “in house”, others will use professional fund raising companies. In my experience the lenders prefer the professionals for two reasons. One, the professional campaign will usually yield 2 - 3 times the amount of money the “in house” campaign will and secondly the actual amount collected will be higher. Again it is a good idea to speak with a few professional companies to find a good fit for your church.

So, as in all things prayer is crucial, planning every step along the way and the assistance of church professionals, those who have completed several church projects in the past year, is highly recommended. Follow these simple basic steps and you should have a very successful relocation project. In our next article we will discuss some of the financial options available for you to choose from.