Church loan program edges closer to reality
Dianna L. Cagle, BR Assistant Managing Editor
January 22, 2009

Church loan program edges closer to reality

Church loan program edges closer to reality
Dianna L. Cagle, BR Assistant Managing Editor
January 22, 2009

Although no loans have been distributed yet by the North Carolina Baptist Foundation (NCBF), it is making preparations for assisting churches with loans.

Dubbed Church Financial Services, Clay Warf, NCBF executive director, said lists are already being compiled to call when funding and the program is organized.

“(The response) has been really excellent,” he said. “We have some who’ve called also who want a call when we’re ready to receive investments for their money to be used to lend to churches.”

Warf said he is “thrilled” when a church can renovate or build without incurring debt. But when ministry needs are too immediate to wait, he said the Foundation will be able now to help.

“I encourage churches to conduct a capital campaign among their members to raise all the money they can before borrowing money,” Warf said. The Foundation is considering offering a capital campaign service but would not launch such a service until at least 2010.

A staff person began Jan. 15 to set up the loan program and begin taking applications.

Attorneys are already drafting documents to make sure the NCBF remains responsible with the money it will be distributing.

“The person we have coming will be working directly with the churches,” said Warf. “He has lots of experience with commercial lending and working with churches. He’ll be able to counsel churches on what’s appropriate.”

Announced during the Baptist State Convention in November 2008, NCBF hopes to offer loans at better than commercial rates.

Initial investments from NCBF’s reserve funds and the Baptist State Convention of North Carolina (BSC) will fund early loans, which Warf hopes will happen by the end of the first quarter but definitely by the second quarter of the year. Warf said some people have called already to invest when the program begins.

“What we’re doing with this ministry is simple, and we’ll have to work this out as we go along,” Warf said. “What we’re planning to do is simply cover our cost.”

Warf said it is important for this non-profit ministry to be responsible and not be a burden.

NCBF looked at similar programs and noted that a program in Florida had just one defaulted loan in 10 to 15 years.

NCBF currently receives less than 10 percent of its budget from the Cooperative Program.

“Our intent is for that to be less and less,” Warf said, “and at some point down the road to be self-sustaining.”

Warf expects many good, sound candidates for loans, but stressed that application criteria will have to be met.

One advantage to the NCBF program is that a new church start with no financial or credit history will still be able to get a loan as long as a sponsor can be found. This could be another church within the association or a planting partner.

For more information, call NCBF at (919) 380-7334 or (800) 521-7334 or visit www.ncbaptistfoundation.org.

Financial health package

Across three issues of the Biblical Recorder and numerous postings online, the BR staff compiled stories dealing with financial health, budgeting, teaching children about money, stewardship issues, etc. For a complete list, click here.