The Five Cs of Credit in Church Mortgage Financing
The Five Cs of Credit in Church Mortgage Financing
What to consider before seeking a loan for property acquisitions or building projects.

Lending institutions often refer to "the Four Cs of Credit." Interestingly, while there is some commonality among those who cite the Four Cs, different institutions cite different Cs, and some refer to five rather than four. The Cs most commonly cited are: Character, Capacity, and Collateral.

Based on professional experience and communications with numerous church lenders over the years, here is how I would state the 5 C's of Church Mortgage Financing:

Character
The integrity and acumen of the church's leaders, and the quality of the church's accounting books and records. Character also includes the quality of the church's governing body (board) and the manner in which the governing body exercises oversight with respect to the church's activities.
Cash flow
A stable history of positive cash flow which clearly supports, in a well-documented manner, the church's ability to honor the proposed debt obligations.

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Posted: December 21, 2015
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