Churches require the help of other financial institutions that are engaged in the business of lending and accepting funds. These institutions are approached by the churches for various purposes such as money or help for finance for either reconstruction, re building, renovation and various other purposes even such as charity.
Churches are nonprofit organizations and thus their system of carrying out their day to day activities as well as their accounting procedures vary. Thus in order for them to avail a loan it often becomes difficult as most of the financial institutions require financial statements that are prepared by an accountant. This process is both time consuming as well as expensive as the fees charged by these accountants are pretty high. And if after all this the loan is not granted, then the trouble is not worth taking. The big financial houses ask for the accounts prepared by an accountant in order to find out the credit worthiness, accuracy and the amount of loan that they can be given.
At the same time there are other financial institutions that are engaged in the granting of loans just based on the financial statements that are prepared internally. But these institutions consider internal financial statement only if they are happy with the track record of the church and also if the statements are clearly understood and if there is no ambiguity in any of the terms or accounts used, but there is no assurance given in the fact that the loan will be passed. There are also other institutions that are engaged in the activity of providing financial advice to churches based on how much the rate will be in order to hire an accountant and also where to hire him from. There are various types of church loans that are available. To name a few;
* Traditional Loans- these are the loans that are traditionally being given. They charge a comparatively lower rate of interest and other reasonable terms.
* Easy Qualifier Loans- these are the loans that are easily available for the newer churches that have not undergone financial shortage in the recent past.
* Low down payment- this type of loan generally allows a church to buy property at lower rates etc.
The church loans are gaining great importance in today’s world as spirituality is gaining importance and there are high demanders for better service.