Some of the greatest deficiencies churches have in their financials when applying for alone include records prepared by people who do not have an accounting background leading to errors. Churches should sit down with a CPA or bookkeeping expert in the area to prepare their financial statements for a loan review and ensure the church has good financial policies and procedures in place for accounting for church assets.
Banks are routinely looking at the age of the church, the leadership and structure of the church, denominational support, giving commitments, average attendance, giving units, and other similar data elements in determining whether to give a loan. Churches need to have good records of these areas of church health so that trends can be established in the loan application process.
Churches should interview their banker in the same way the banker interviews the church. Is the banker a believer? The banker should share the vision of the church. This relationship should begin months before a loan application is filed.
When churches get in financial trouble, they need to get their finance team involved early. Debt should not be a hindrance on the church's ability to spread the gospel. Many times there are variable expenses that need to be cut.
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