Embarking on a church construction project can feel like entering uncharted waters. W&O has the extensive knowledge and experience to help you safely navigate the intricacies of church construction.

Define your needs.

Before diving into blueprints, give thoughtful consideration to exactly what your church needs. W&O can help define and clarify your vision. Our integrated approach to design-build construction management gives us unique insight into the entire construction process from start to finish – helping you maximize  return on your investment.

Know your options.

Once you have decided whether to remodel, expand, or undertake new construction, you enter the turbulent process of financing. Church finances are unique and can be highly variable. Cost estimates provided by W&O’s experts will help you accurately budget for your endeavor.

Your church committee should determine the best financing option, which may include third-party loans. Lending institutions offer a variety of loan vehicles to support your venture. The most common are:

• Term Loan: For church construction, these tend to have payoff terms between 5 and 15 years
• Construction to Permanent Loan: Popular when purchasing unimproved property for new construction, though it can be used for renovations
• Line of Credit
• Short Term Loan

For most church improvement loans, the building is used as collateral. Because of the highly specialized design features and the difficulty in reselling in the event of default, lenders tend to have particularly conservative requirements for church property loans. A single facility can typically represent the collateral for up to 75% of the value of the loan.

Be prepared.

If you decide to acquire a loan, you will have to present a convincing picture of your church’s financial horizon. Advanced planning will help you keep your head above water in this often overwhelming flood of paperwork and interviews. The underwriter is tasked with gaining a full understanding of your church’s financial situation, including cash flow, debt ratio as it relates to the building as well as your contributing members, and anticipated growth during the term of the loan. Your lender is likely to request the following input:

• Most recent financial statements (2 to 3 years)
• Most recent operating budgets
• Deposit statements
• Number of active members making regular donations
• Total debt
• Annual gross income

Your underwriter may visit your church and attend service to have a better understanding of your loan request and its justification. Be preapred to answer the following questions:

• Why do you want to expand your facilities or build a new facility? Are services overcrowded? Are you offering multiple services at or beyond capacity?
• What are your current levels of membership, pledges and contributions?
• What are your discretionary expenditures? What expenditures are necessary for the church to operate?
• What is the source of repayment for this request?

Once your financing is finalized, you are ready to begin construction.