3 Church Loan Mistakes to Avoid

3 Church Loan Mistakes to Avoid

When taking out a church loan, pastors are making a large financial commitment to their church’s future. It’s a process that should include smart planning and prayerful consideration.

Taking out a loan before your church is ready can have negative effects for everyone involved. We want to share a few mistakes that we’ve seen that you should take into consideration when thinking about a loan for your church.

1. Don’t Purchase Before You’re Ready
If your church is currently renting its facility, you may feel the desire to build your own facility. Remember, though, there are more costs involved with owning than just buying the land and building a structure. There’s maintenance, lawn care, extra insurance, and a myriad of other costs.

And don’t take the flexibility of renting for granted. Many landlords are willing to negotiate with good tenants. But when it comes to a mortgage, lenders are typically less forgiving.

Buying land and starting construction is an important and exciting time in every church. Just make sure your God-given vision for buying aligns with His timing.

2. Evaluate the Budget Regularly
As you review your budget, be sure to assess where you should be spending your money. If you’re not the type of person who can commit to creating, following, and evaluating a budget you need to surround yourself with someone who can. A good leader knows his weaknesses and is willing to delegate those tasks to people who can help. Your church’s budget is too important to overlook or avoid.

3. Hire Appropriately
If you’re starting a new church, it may not be necessary or financially feasible to hire somebody for every unique job. Determine if there are tasks that can be added to traditional roles in the church, or create your own roles. When your church is in its infancy, finding people who are willing and able to perform multiple duties is a huge benefit.

Make sure the people you hire believe in your church’s vision and will commit themselves to it.

Another common mistake churches make when it comes to hiring is not hiring people who are in it for the long haul. Make sure the people you hire believe in your church’s vision and will commit themselves to it. Hiring a talented, passionate person who’s only going to be there for a year because he wants to start his own ministry may sound like a good idea, but when you’re investing a significant amount of time and resources into vetting and hiring new employees, this may not be a financially wise decision.  

Of course there are many other things to consider before taking out a church loan, but by avoiding these three mistakes you’ll be more prepared to determine if your church is ready to take that final step.


AG Financial Solutions is one of the nation’s largest church lenders. Contact one of our loan consultants at 800.449.5626 or email us at loans@agfinancial.org for more information on how we can help you through the process of obtaining a church loan.