by Moody Adams “During this holiday season of hard times, not even houses of God have been spared. Some lenders believe more churches than ever have fallen behind on loans or defaulted this year” writes Suzanne Sataline in the Wall Street Journal (December 29, 2008) Some churches, and at least one company that specialized in church lending, have filed for bankruptcy. Church giving is down as much as 15 percent in some places, pastors and lenders report. Lenders say mortgage applications are down, while some commercial lenders no longer see churches as a safe investment.”
The Mount Calvary Missionary Baptist Church, of Jacksonville, Fla., borrowed about $2.6 million in 2002 for a new building. The church's 1,200 members pledged $1 million to the building campaign, but two-thirds of that money was never actually donated, according Pastor John Allen Newman. When many members quit coming they cut staff and expenses, but facing a $3.3 million judgment they were forced into bankruptcy.
"There have been too many churches with a 'build it and they will come' attitude," says N. Michael Tangen, executive vice president at American Investors Group Inc., a church lender in Minnetonka, Minn. "They had glory in their eyes that wasn't backed up with adequate business plans and cash flow."
See full article: http://www.baltimoresun.com/business/bal-church1229,0,2679894.