The only time a church mortgage gives any cause to celebrate is when it’s burned. Otherwise, it’s a drain on resources. Interest payments can easily triple or quadruple the cost of a church building.
Beracah Bible Church decided to forgo the joy of mortgage burning for something better: no mortgage at all. Here’s how it did it:
When our church began, our board of trustees quickly agreed that the congregation would function on a “pay-as-you-go” basis. Simply put, this policy allows us to spend only the money already in hand.
Two factors led to this decision: (1) Several churches and religious organizations in our area had been financially irresponsible, thus tainting the reputation of the rest of us. They assumed huge debts for building projects as a “step of faith.” In reality, it was a step of presumption. They were convinced it was “God’s will,” but it became a stone of burden for the whole Christian community.
Their desperate appeals for funds and their defaulting on payments created a negative image. Banks were reluctant to foreclose on religious organizations, but they weren’t eager to deal with any new churches, either. (2) We had no significant borrowing power anyway. Our only collateral would have been the personal property of members, which is what banks were demanding. Rather than asking individuals to cosign, our trustees unanimously endorsed a policy of nonindebtedness. It has served us well for decades.
For the first 15 years, we were content to meet in a series of nine locations for nominal rent, sometimes only the cost of utilities. We started with five families who gathered for worship in a vacant bank building. Later we used the hospitality room of another bank and eventually moved into a house, where we grew to 125.
At first the makeshift locations didn’t bother people; they came for content, not surroundings. But soon the surroundings were interfering with the ministry. We literally had people sitting on one another’s laps.
After three more moves, our people were ready to forsake the nomadic life. The final straw came when we discovered we could be locked out; one Sunday, for instance, “our” meeting place was preempted by an antique show.
It was then that our policy against deficit spending got its greatest test. Already the cash policy had been successful in paying for several church automobiles, a van, and a parsonage. But the huge estimated costs for a modest auditorium and land to expand was a much larger challenge.