Church Construction Financing

Your church is growing and you're out of room.

It’s standing room only and you're afraid you will start losing people!

You meet with your church board, and collectively agree you need to expand.

An Ad Hoc committee is formed, you retain an architect, design the vision God gave you, get it approved at the local town board, find a builder, price the project and discover you’re 50% over what you can afford!

Then starts the painful task of reducing the project size; the timeline to construct is double what you thought; members are upset because someone is not getting what they voted for; and you have no clue how to pay for it.

You look to your experts for advice, which they gladly give for a fee. People are starting to leave because they have lost both confidence and hope the project will get done, and now you wonder if you missed God's call to expand.

After much toil, sweat, determination, and the expense of personal stress, you get the project done. Those that have left are back saying great job, and you want to quit. As you reflect you say to yourself, "I only wish I had someone who could have walked us through this project." Constructing a church facility cannot only be long, expensive and difficult, but can easily cause you to lose focus when faced with all these challenges.

We have some good news... We can help!

Where are you in the construction process?

• We are planning to build
  Have you selected an architect?
  - Look for a registered/licensed Architect or Firm.
  - Ask for a portfolio of similar projects.
  - Qualify those references – call them!
  - What are the costs of their services as related to the scope of the services?
  - Does the Architect have a complete team including consultants with the appropriate engineers to assist with the project?
  - Ask the Architect to supply, in writing, what their firm offers as a scope of services.
  - Are site inspections included?
  - Are engineering fees included?
  
  Do you have property?
  - What are the costs associated with replacing what you have now?
  - What will you do with your present facility if you move?
  - Will the present/new property support this church for the next 25 years? - What are the local code requirements on land regarding your proposed uses?
  
  Do you have a builder?
  - Ask for a portfolio of similar projects.
  - Check that the builder has a permanent on-site supervisor.
  - Call those references!
  - Who writes the checks to the subs?
  - Who is responsible for cost overruns?
  - Are they willing to give a maximum price?
  - Is the project cost plus?
  - How will the CM manage change orders?
  - Does the CM understand your budget?
  

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• We're ready to build
  Do you have a builder?
  - Ask for a portfolio of similar projects.
  - Check that the builder has a permanent on-site supervisor.
  - Call those references!
  - Who writes the checks to the subs?
  - Who is responsible for cost overruns?
  - Are they willing to give a maximum price?
  - Is the project cost plus?
  - How will the CM manage change orders?
  - Does the CM understand your budget?
  
  Do you have town approvals? Do you have permits?
  - What are the local code requirements on land regarding your proposed uses?
  - Is your proposed use a permitted use?
  - Has there been an engineering study completed on the land? This will determine soil issues, rock issues, drainage issues, etc.
  - Does your property require unusual setbacks?
  - Does your property support a septic system, or public sewer?
  
  Do you know the costs to build?
  - The first step to a successful building project is understanding what you can afford.
  - Your financial information should paint a clear and complete picture of the Church’s ability to pay for the proposed project.
  - Use your finance team and lender to determine what you can afford to borrow.

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• We have the money to build
  Do you have a current loan commitment?
  - Get as much cash as you can before borrowing.
  - Accelerate payments and payoff debt early.
  - Be conservative, cautious, and enjoy your sleep: don’t over borrow!
  - Make sure that the church is behind the project.
  - Be careful and use credit sparingly, but recognize that debt is useful for financing a growing ministry.
  - Pray until you are confident of God’s will. Then step out in faith that God will give direction and provision.
  
  Do you have enough cash on hand?
  - Develop your project budget with your Construction Professionals utilizing a Schedule of Values.
  - Every category should have a cost.
  - Every cost should be all inclusive.
  - Every price should be rigidly adhered to.
  - Award contracts as soon as possible, locking subcontractors in, giving them the chance to buy materials now, potentially saving you money.