How long does it take to close a Church loan?

Loans are typically receive preliminary approval within 10 days and close within 30-90 days. This is dependent upon the church providing documentation in a timely fashion. New construction may take longer.

How do you determine a Churches borrowing power?

A church can generally borrow between 2 and 4 times its gross Income but sometimes this number can be higher depending upon the churches cash flow and debt ratios.

If a commercial bank turns our Church down for a loan can we still be approved through a lender in the Emerging Capital Funding Network?

Yes, commercial banks turn down churches all the time. If you have been declined by a commercial bank it does not mean you do not qualify for a loan. Church lenders specialize in assessing and meeting the loan needs of churches and non-profits may be a great alternative option.

How is a Church loan written?

There are many factors taken into consideration when underwriting a church loan and different loan programs have different underwriting guidelines. Some of the more standard considerations for a church loan are: longevity of church, pastor’s tenure, yearly revenue and attendance trends, giving units, debt service coverage ratio, loan to value, cash on hand, and current debt levels.

How long does the church have to be in business before it can borrow money?

Normally, a church has to be in business a minimum of 2 years to qualify for a loan but exceptions are made.

What is Debt Service Coverage Ratio?

Money available to make the mortgage payment after paying normal operating expenses.

How are construction loans handled?

With a construction loan, the total loan amount is approved at closing and all the documentation is prepared and signed at closing. The church can then draw as much as is needed during the construction phase. At the end of each month, the church is billed for the interest on the amount that has been drawn to date not the total amount of loan. At the end of construction, the loan will typically convert to a permanent principle and interest loan.

Does a church loan need personal guarantees?

No. We only work with church loans and church financing which do not require personal guarantees.

What if a bank is foreclosing on our church? What are our options?

First review your options legally with an attorney. We may be able to help negotiate a discount between your existing lender and new lender.

How much of a down payment is necessary for new construction or property purchase?

Typically, a Church is required to put down between 10%-30% of the purchase price as a down payment but there may be times when more or less is required.

How long can a loan be written for?

Amortization periods can be as long as 25 and 30-years. A typical term is based on a 25-year amortization period. Terms may be shorter such as a 10 or 15-year fixed period.

 What types of loans are available?

Emerging Capital Funding offers a complete range of Church Loans and Church Financing which include New construction, Refinance, Renovation, Short-Term Loans, Bridge Loans, and New Church Plants.