I’ve spent the last 3 posts talking about getting your church ready for a loan, (or how to do your best in getting into debt…Lol).

See part 1 of that series here.

If you choose to finance your church expansion, just know that some in your fellowship will be adamantly opposed to debt. Know also there will be people who join ‘post-debt creation’, that will feel the same way. (You know – debt is a sin or it shows a lack of faith or is just plain bad stewardship). Those are the same ones who have a mortgage of their own, and car debt and…

Now, debt is not a sin – not repaying the debt is.

But. I also know debt can be misused – as in too much or not for the right things, (like operations or frivolous items).

Obviously, don’t get into too much debt where you can’t make the payments for sure. The other side of the coin is, yeah, you can make the payments, but ministry suffers because the debt takes up a significant portion of resources.

Neither of those are good stewardship.

If you’re in debt already or are going into debt, a word of advice – make plans to pay the debt off early. Get out of it as quickly as possible.

Just know, when you go in debt you’ll lose some folk, and you’ll lose some that don’t want to get any bigger as well.

Obviously, the other option is to not borrow at all – build on a cash basis. If you can do this and God is leading that way – do it.

4 Thoughts on Debt vs Cash

1. Sometimes though, for small churches that are land locked, and can only grow so much via multiple services, they may opt to go into debt because to not do so would mean building may be 5 to 10 years away – or longer. You’d lose so many folks potentially – existing folk who get tired of the cramped spaces – newcomers that don’t come back or stay long – it’s just too crowded. (Sadly, it’s not always a given they can just go somewhere else and get plugged in or experience life change). So, sometimes churches need to strike while the iron is hot.

2. On the flip side, larger churches that are still growing (they’ve already expanded and paid the debt off) that have the space/land and financial resources can build on cash. From a financial stewardship perspective, that’s the way to go. No interest cost, just the discipline to wait on the funding. If God is leading this way, He’ll provide the discipline to wait and the resources.

3. And of course, there’s the option of building using both cash (beyond the minimum required for the Loan To Value) and debt. For example, raise half in cash, finance the other half or a 60/40 split and so on. You’re waiting longer to build and reducing interest costs once you build. (And the time required to pay the loan off).

4. Something else to consider. In addition to financial stewardship, there’s the stewardship of souls in your community (how much is a soul worth in $’s)?

If you’re growing, (God is moving, life change is occurring, people are being saved, discipleship is increasing, people are excited) you’ve added services but are land locked, can’t add any more parking and are packed to the gills – the use of debt sooner rather than later may in fact be the right option, especially if that’s where God is directing. Here’s what I know, if God leads that way (use of debt), rest assured, He’ll provide the funds to repay the loan.

I was in such a church. We raised money for a down payment on land, we borrowed the rest and paid it off early. Then, we raised more in a capital campaign, borrowed ($3.2 million) to build and moved.

What happened was – (readily measurable):
In the 3 years before we moved, we baptized 120. (Way beyond the avg of 10 per year in the SBC in those years). In the 3 years after the move, we baptized 549 people! I’m sure this wouldn’t have happened had we tried to raise the $3.2 million first. There were so many other things that God did post-move that was nothing short of AMAZING.

I’ll leave you with one last option:

If you are busting at the seams, look for a larger space you can rent. This would allow you to continue to grow while setting aside funds to purchase your own facilities later. Assuming you own the place you’re currently in, you could possibly sell it while you’re in the rental space.

The Tension:
I get it, there’s a tension to manage here – stay where you are for potentially many YEARS and lose momentum (and souls), or expand as soon as you can and incur interest costs.

My Advice:
Dream big, pray, consult, obtain counsel, plan – rinse and repeat.

Go into the process allowing God to direct. Proverbs 16:9, “The heart of man plans his way, but the Lord establishes his steps” – and give Him the right to change your plans as you take steps of faith.