Pitfalls to Avoid when Considering Church Construction

Church Loans

Part 3: Choosing a Lender

In this series, we started by covering price increases and how they can affect your church construction project. We stressed the importance of being aware that a contractor’s actual bid is often higher than the original estimate.

Also, we covered ‘cost-plus’ contractors and why you should be weary in hiring them. Click here to read that whole article. After that, we discussed how important it is to understand source and use. “Source” is the source(s) that are going to be used to fund a project, and “use” is the actual cost of the project. Click here to learn more. Now to close this series, we will be discussing the importance of choosing the right lender. To help us with this topic we once again speak with Shawn Fink, Church Loan Consultant, and Brad Gillam, Construction Loan Manager.

Finding a lender can be overwhelming. There are many different types of financial institutions to choose from, and not all will fit your church’s individual needs. Be sure to research each option to determine which will best serve your church. Also, keep in mind how the lending institution would utilize your funds. Unfortunately, quite a few national lenders may utilize interest income to support corporate causes that may not line up with your Christian values. You can continue being good stewards of the money entrusted to your church by being diligent in choosing a lender whose values align with yours.

When you work with AGFinancial, you get more than a lender—you get a partner that understands ministry. Brad shares, “We work to make sure the church has help in every stage of their project, not just in obtaining the loan.”

Shawn Fink explains that the role of the AGFinancial loan consultant is to walk a pastor through the process. He takes the time to understand the church’s finances from a ministry-first perspective and ultimately determines the best financing strategy for a church based not only on the numbers, but also the church’s unique situation and God-given vision. He states, “Often, banks will look first at their own needs and quotas, and select borrowers that fit in their box, sometimes basing affordability on income the church never intended for debt service.”

Regardless of who you choose, make sure to partner with a lender that understands the unique needs of ministry, the ebbs and flows of church business, and how to support church growth.

We hope this series has been beneficial in the planning process for your church construction project.

As mentioned above, check out part 1 on price increases and part 2 on source and use.

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