Information needed before getting a bank loan

A completed loan application:
The application form varies from lender to lender. Please contact the lender of your choice to request this form. (See below for an example list.)

An appraisal:
Please contact individual lender for specific requirements.

Copies of the last 3 years financial statements and budgets:
Special contributions and fund drives should be listed separately. Also be sure to list non-discretionary expenses (staff salaries, mortgage, utilities, etc.) separate from discretionary expenses (i.e. ministries, missionary sponsorship, etc.). Many lenders simply look at cash outflow verses income. Since most churches spend most of what they receive this makes them look as if they are not viable enough to qualify for a loan. By breaking out your expenses you will be able to show that if you got in a financial bind you could (if absolutely necessary) take money from your variable expense accounts to meet your financial obligations.

Purpose of the loan:
Are you building new, expanding or remodeling? Is it a sanctuary, family life center or classrooms you are building? Many financial institutions will require a very detailed explanation of how, when and why you are spending the designated funds.

Church history and attendance figures:
How many people do you have that come to service on a typical Sunday? Not just membership. What is your churches history? On what date were you founded. What is the date you incorporated and when did you become a 501(c) corporation? What type of organizational structure do you utilize (i.e. do you have a board of trustees, are you a member of a national church body, etc.)? Please list officers of corporation. Any special or unusual conditions concerning the loan request. Some things that may apply for special consideration are grants, endowments, any stewardship funding results or other special funding outside of the loan.

If you are a newer church:
Consider seeking the guidance of another church that has gone through the process recently. They can offer a lot of insight. However, if your church is less than 2 years old most financial institutions will not be able approve your loan due to the lack of background on which to base the loan. There are other options that you may consider such as bonds, grants, stewardship funding, etc.

An example of what documents are often needed for a religion loan:

Small Business Loan Application Form (signed & dated)
Church Loan Application with very brief letter or memo stating the purpose of loan, specific amount requested, and loan structure (# of years term & amortization) requested.
Resumes of senior clergy-person & assistant clergy-person for loan amounts over $500,000.
Bank Statements &/or investment account statements reflecting checking account balances and reserve funds available for at least two of the last six months. Balances on statements should closely match what is reflected on the balance sheet.
Borrowing Resolution authorizing specific representatives to sign the loan documents on behalf of the congregation. Must be signed & dated.
Bylaws & Articles of Incorporation and other organizational documents which reflect who is authorized to sign the loan documents on behalf of the church.
Certificate of Good Standing IMPORTANT Please ensure your church is active and is in good standing with the Secretary of State as the Bank will need to obtain a Certificate of Good Standing before loan closing.
Real Estate Taxes - It is important to contact the County Assessor's office as soon as possible to verify that there are no outstanding real estate taxes. Delinquent taxes are often a cause of delayed loan closings.
Payoff Statements on any existing loans which reflect the account number, mailing address, loan balances, and wiring instructions from all creditors for any loans or credit cards to be paid off dated as of three weeks from date of application with the "per diem amount also.
Provide Income Statements & Balance Sheets for last two years (signed & dated) VERY IMPORTANT: Please provide a detailed list of any one-time or non-recurring capital expenditures i.e. replaced roof, purchased piano, equipment purchases, purchased vehicle for cash. Also, provide YTD interim income statement & balance sheets
Completed Environmental Questionnaire signed & dated. Provide a Phase I or Phase II report, if available.

FOR REAL ESTATE FINANCING ALSO INCLUDE:
Appraisal done w/in last year. (Note that a full appraisal will be ordered by U.S. Bank at the borrower's expense if required by credit policy.)
Purchase Contract (if applicable)

DOCUMENTATION NEEDED PRIOR TO LOAN CLOSING
Title Insurance Company - Name, address, loan closer or contact person, telephone & fax number.
Property Survey - Note that updated survey may be required if the title company will not provide survey coverage using an affidavit.
New Construction Projects - Guaranteed maximum price contract along with all necessary permits.
Certificate of Insurance of Hazards
Certificate of Flood Insurance
if applicable.

If your church would like more information on any of these items please contact us at 1-800-420-7022.

Click here to return to the finances page.