Yesterday I had the pleasure of attending a season on church loans conducted by my long-time friend Matthew Carter.  Matthew is the Vice President of The Baptist Church Loan Corporation (BCLC).  We have been close friends for 15 years.  He is as good as it gets.

The BCLC has served Southern Baptist churches for over 60 years.  This non-profit organization currently manage 500 churches, never sell loans, has no application or origination fees, and no pre-payment penalties.  I LOVE this organization.  If you are a Southern Baptist church, no lending institution will treat you better.

What makes Matthew so effective is he understands church leadership and can attach church loans to mission and vision better than anyone I know.  His insights were so valuable I wanted to share them with you.

The following are 37 Things Pastors And Church Leaders Should Know About Church Loans:

2008 Markets Fall

  • Churches end the year with stability.
  • Impact on churches was delayed. From 2009 to 2013 churches then realized the impact of unemployment and under-employment.
  • Churches delayed projects and cut money to missions and personnel.
  • Over 300 church foreclosures between 2009 and 2013.
  • Church property values plumment. Banking underwriting guidelines tightened dramatically and they cooled to the church market.
  • Churches struggled to find financing.

2014 Markets Revitalize

  • The economy improved. Tithing rebounded allowing churches to strengthen.  The job market improved.  Property values stabilized.  Church construction rebounded.
  • Tithing normalized in 2015 and 2016.
  • Appraisers are giving $60 to $70 per square foot to churches.

Developing A Loan Package.  You need the following:

  • Three years of financial statements
  • YTD financial statements
  • Baptisms
  • Membership
  • Small Group and Sunday School attendance. This measures your core.
  • Average weekly attendance
  • Giving Units
  • Balance Sheet (Assets/Liabilities)
  • Constitution and Bylaws
  • Pastors bio and resume. Stability is important.
  • Project details – early estimates, preliminary designs, construction timing, architectural information

Underwriting Guidelines

  • Debt Ratio – 25-30% of Undesignated Income especially for churches who are plateaued or declining. This is your annual debt payment divided by Undesignated Income.
  • Fixed Expenses – 85% of Undesignated Income (Annual loan payment + Utilities + Staff costs) divided by Undesignated Income
  • When it comes to church loans, remember Larger Staff = Smaller Building. Smaller Staff = Larger Building.
  • Staff Costs – 50% of Undesignated Income (Salaries + Benefits + Housing + Payroll Tax) divided by Undesignated Income
  • Loan To Value – 75% of Total Value of Property and Improvements
  • Debt Per Attendee – Not to Exceed $7,000. This is the loan amount divided by average worship attendance not including children.
  • Most churches can borrow three-times their income.

Closing Process

  • Appraisal Requirements – 4 weeks. Federally regulated banks see appraisals as good for six months.
  • Survey Requirements – 4 weeks
  • Title Commitment / Insurance – 2 weeks
  • These are to be completely concurrently.

Current Rates

  • Rates remain near historic lows. Expect 3.75% to 5%.  Rates are normally at 6% to 7%.


  • The market seems to have improved.
  • Lenders have warmed to churches.
  • Expect tighter requirements.
  • Possible higher closing costs.
  • Rates that are still near all-time lows.

If you are a Southern Baptist church, and need to borrow money or refinance, you can contact Matthew at 678-477-3173 or

As a way to invest in every pastor and church leader reading this post, INJOY Stewardship Solutions wants to provide you with this FREE Ebook Slaying The Debt Monster.  If your church has debt, this resource will provide you the insights needed to kill church debt.  If you are looking at a capital campaign to address this need, feel free to email me at  I would be honored to assist you.


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