Lenders will want to know about your ministryís management and how it is structured. They will ask where the organizationís authority rests and whether or not there is appropriate accountability and controls in place. Consequently, your ministry should have a brief written summary that includes the following information:
- Management structure: explain who the governing body of your organization is whether by congregation, board of directors (or equivalent board), denomination, or other governing body.
- Management accountability: explain the organizationís financial controls, how major decisions are made (acquisition of property, hiring/firing staff and so on), and who the key leader is accountable to.
- Resumes or biography for each executive staff member
- Succession plan
- The ministryís historical milestones
While the information you collect regarding your management tells a lender about the organizational strength of your ministry, financial information tells a lender about the fiscal strength of your ministry. Be sure to include the following:
Note: Financial statements should be produced using accounting software that is able to adequately handle your ministryís budget size and accounting format. Depending on the size of your organization, its annual budget, and the amount of your loan request, a lender may also want to see financial statements audited by a Certified Public Accountant (CPA). If your ministry elects to engage a CPA, confirm he or she is qualified to produce audited financial statements for ministry organizations.
Whether or not your ministry is requesting a real estate loan, a lender will probably want to know about your ministryís real estate holdings. As for Christian Community Credit Union, it helps the Ministry Development Officer understand your ministry and make suggestions that are in your ministryís best interest. This information is also used by the underwriter and other lending staff to complete the processing of loan requests. Include the following (if available):
- Listing of all real property owned by the ministry
A copy of the most recent appraisal
A copy of the most recent property tax statements
Construction or renovation work completed and the date the work was completed
Most recent land survey
Contact information for your property insurance agent
Corporate documents are used by the lender and title company to confirm the ministry is operating within its bylaws and constitution and to ensure that it is in good legal standing with the Secretary of State (or Secretary of Commonwealth depending on the state in which the organization resides). Include the following:
- Minutes of the meeting in which the resolution to borrow and grant collateral was approved. The minutes should include the:
Number in attendance
Description of the collateral to be used (if real estate, include addresses)
Maximum amount approved to borrow, and
Original signature of the person authorized by your bylaws and constitution to certify corporate documents (e.g., Corporate Secretary, Church Clerk)
- Corporate Resolution to borrow and grant collateral
- Articles of Incorporation including all amendments
General Information for Churches
Other general information that would be helpful to a lender:
- Weekly attendance
- Current church membership figures
- Giving Units
- School enrollment figures
Donít Be Discouraged
Donít be discouraged if you canít locate this information all in one sitting. Depending on the age of your ministry, this information may have accumulated over several decades; give yourself some time to collect it. Remember that most ministries donít have this information centralized. By taking on this task, you are already further along than you were before.
Also, donít be discouraged if you canít locate some of the information at all. You may be able to replace the missing information by contacting:
- The Secretary of State or Secretary of Commonwealth for documents of incorporation
- Vendors, like a former appraiser or land surveyor, for copies of reports
- A Title company to purchase a title report or title commitment which will give you the current condition of title to the ministryís real estate
- Staff, volunteers and former board members who can be an excellent source of information as some of them may have kept copies of information like minutes, bylaws, and other documents
There is no guarantee youíll be able to replace information thatís been lost, but you wonít know unless you try. A cautionary point before ordering information, get a price quote as institutions generally charge for copies of documents/reports.
Make Steady and Consistent Progress
The benefit of keeping a centralized file with information relevant to a loan request is twofold. First, it will position your ministry to respond well to your lenderís requests. Second, going through the exercise of keeping the information current will position your ministry to respond well to a number of other requests and endeavors your ministry may undertake.
Preparing for a loan request may seem daunting, but doing so will prevent a lot of headaches. Take your time and simply focus on making steady and consistent progress.