Church Bonds as a Financing Option
Church Financing Options
There are similar features with a church bond as there are with a commercial loan, in that a church bond program is fixed for a certain period of time and has a certain repayment schedule. One of the biggest benefits that church bond financing can offer a church that most conventional bank loans cannot provide, is that church bond financing can provide churches with a fixed interest rate and repayment schedule similar to a fixed rate residential mortgage loan. On the other hand, with church bond financing, the church has more flexibility and control since the interest rate and the amortization or repayment period is fixed the full term of the church bond issue. With church bond financing, the church is effectively setting up a permanent repayment plan for the entire term of the bond program. With a church bond program, the church is paying the interest on the church’s loan to church bond investors, such as members and friends of the church, and other church bond investors and not to a bank.
Consider All Church Financing Options
Consider all options when seeking financing for your church. Conventional bank financing can be a better financing option under certain circumstances. For example, if a church is only in need of short-term financing, then a bank loan may be the better option. However, if the church needs or wants the certainty of a long-term fixed interest rate and repayment period, then church bond financing may be the better financing option. Church bonds can give the church a long-term, fixed interest rate and repayment period that it would not have with a commercial bank loan. And, many churches with long-term capital needs prefer that the interest paid on their church loan go directly to church members and other Christian investors, instead of a bank.