What
can our church afford to build?
Financing
is by far the most important aspect for a project. How large the building
will be and what is included in the building is going to greatly depend
on what can be afforded. A good place to start is to calculate
your estimated budget. From here you can tell what you can afford
and how to raise the funds.
How
much money do we need before we begin construction?
-
It
depends on how much equity you have in existing land and buildings.
It may be that you do not actually need any cash if you have adequate
collateral. Most lenders will require at debt-equity ratio of 70%,
either in land, buildings, or cash. Most importantly they are interested
in the ability of the church to service the debt.
How
do we estimate the cost of a new building?
-
Building
cost estimates can decrease or increase depending upon your location,
resources, talents available in your congregation and so on.
-
Cost
forecasting and budget control lies largely in the proper selection
of an architect. Look for someone with extensive church design experience,
as this can aid greatly in the forecasting of probable building
costs. Failure here can result in catastrophic cost increases from
the conceptual estimates to the final bids.
-
Often, improper information at this stage can actually derail the
whole project. Be sure to ask specific questions of any prospective
architect as to how they determine and control project costs and
how they handle catastrophic budget problems. A church architect
should be working for the church and with the builder.
-
As
stated throughout, financial constraints will determine size of
a building.
Raising Funds
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As an initial
step, we suggest contacting prospective lenders and asking
them for information needed to enable them to determine the amount
of money for which your church qualifies. At this point, you are not
asking for a loan for a specific project. You are only establishing
the financial boundaries that you will need to be operating within.
Also, be aware of any limitations, guidelines, or restrictions placed
on your congregation if you are affiliated with a particular denomination.
In addition, the following options may add additional information:
-
Stewardship
Funding -- Raising money from the congregation. There are many programs
available. Some even with guarantees.
-
Mortgages
-- Borrowing from a bank
-
Your
Denomination -- Check with your church denomination about funding
and funding resources that may be available to your church through
your denominational headquarters.
-
Search
the Internet for church financing. -- There are a few companies
that specialize in church financing.
-
Bonds
--There are various bond programs available for each church. Again
search the Internet for bond programs.
This tool is born
from 20+ years of assisting churches build their buildings within their
established budgets. You may find it helpful in the evaluation of your
churches finances.
Click
here to go to the Finance Evaluation Tool
You
may view a presentation online, or you may download the presentation
for use at a later date without being online.
