Hard Money loans for churches

Is Hard Money Lending an Option for Churches? Hard money loans offer alternative financing to churches that fail to qualify for traditional loans.

last updated Wednesday, May 17, 2023
#Hard money loans #Lending to Churches

John Burson     Subscribe
Hard Money loans for churches


Are you aware that churches can now access hard money loans? May American banks are foreclosing on churches without considering refinancing options. Over 50 percent of American churches are in a financial crisis, with some choosing to auction themselves. Hard money lenders offer several options to churches with very high-interest rates. However, churches may consider hard money lenders or risk losing in tough times.

Understanding Hard Money Lenders

Hard money lenders offer direct loans to individuals and organizations that cannot access traditional loans due to poor credit scores or bankruptcy reports. The lenders rely on tangible assets or real estate properties as collateral. They also offer a shorter lending process, which takes less than ten days to approve and disperse the funds. Customers enjoy little or no upfront fees and can negotiate for as much money as they need.

On the flip side, hard money loans come with a high-interest rate and a low property-to-ratio value; customers often receive funds that do not match the value of the property provided.

Recently, a report by Song Quichocho shared the news that several hard money lenders had started special funds to cater to struggling churches. There are private accounts funding churches that face or are in foreclosure.

Some of the challenging loan conditions include:

  • Churches must pay the interest,
  • The lender acquires the property and offers a lease-purchase agreement to safeguard the company if the church defaults.

Usually, churches avoid hard money loans. However, recent changes in the financial markets have put churches in challenging positions, forcing them to choose between unconventional financial methods or risk losing their properties.

Under What Conditions Should a Church Consider Hard Money Loans?

  1. When the church is facing foreclosure threats
  2. If the church cannot qualify for a traditional loan
  3. When the church is under pressure to close on a reduction from its lenders
  4. In the face of bankruptcy, when a loan is the only option
  5. At the beginning of a one-time opportunity that needs fast cash

Chances of Accessing a Hard Money Loan as a Church

Hard money lenders offer churches a commercial bridge loan after assessing the property to establish whether the church deserves the funds. Older churches with prime properties and good reputations qualify faster. The lender will often consider the value of the church’s property compared to the requested amount. Churches should note that different lenders offer varied conditions, requirements, fees, loan services, and schedules. Church leaders should speak to different hard money lenders and confirm their certification with the National Mortgage Licensing System (NMLS) and other regulatory bodies in their state. Lenders should also abide by the Dodd-Frank Act, which requires them to charge reasonable interests and favorable repayment terms.

Conditions for Lending to Churches

Some hard money lenders do not work with churches: those that work with churches have their specific regulations and conditions. A church looking for a loan should spend considerable time searching for the lender with the best rate and favorable conditions.

Hard money lenders come with a higher interest rate. However, many churches are losing worshippers, and are in dire need of financial assistance. Hard money lenders offer an alternative for churches to keep doing business. Recently, churches can proceed confidently as government regulations in the complex money lending industry protect borrowers from fraudulent lenders while ensuring reasonable interest rates.


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