Many of the ministries we serve incur debt.  In most cases, debt is fine - one of the normal costs of managing a congregation.  Debts/mortgages for building programs and capital improvements are appropriate.  Most debts accumulated from operating deficits are not appropriate and can lead to serious problems.

Congregations can handle long term debt in the range of $3,500 to $4,000 per active, confirmed member.  The key to paying off such a debt is to keep it "in front of" the members and to ask for separate annual or three year debt reduction/elimination commitments.  Most of our clients borrow for 20 years and pay off mortgages in 12 years with aggressive debt reduction strategies.

Now is a good time to borrow or to refinance a debt.  Interest rates are at historic lows.  Residential interest rates are in the 3.5% to 4.5% range.  Some of the ministries we are working with are borrowing money for 5% to 6%.   Lower interest rates make building or capital programs much more affordable.  Lower rates make paying off a debt much easier.

To discuss a debt reduction strategy for your congregation/institutional ministry, give us a call - 800-258-7575.

                         Written by Bob Connolly, Vice President, Co-owner 

The James Company