RICHMOND — Virginia Baptist churches which are struggling with financial shortfalls may find some relief as a result of a new policy adopted July 24 by the Baptist Extension Board.
For the first time, the Extension Board is offering loans which struggling churches may use to cover unpaid debts or other obligations. Previously churches could use Extension Board loans only to purchase property, construct buildings or renovate existing church facilities. The application process for the new loans also is less complicated and time consuming than the process of applying for property, construction or renovation loans.
Eddie Stratton
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“We expect these loans to be used primarily to resolve cash-flow situations,” said Eddie Stratton, treasurer of the Extension Board. “The board has over five million dollars in assets available for loans and we thought we should see if there were ways we could help churches that are hurting in this economic climate.”
At least initially, churches may receive loans no higher than $25,000 and the total amount of Extension Board's assets loaned for the purpose will be limited to $200,000. Each loan will have a maximum term of five years at 5 percent interest.
If the number of requests exceeds $200,000, the 15 directors of the Extension Board may take another look at the limitations, said Stratton, who also is treasurer of the Virginia Baptist Mission Board.
The directors have authorized both Stratton and John Upton, who serves as executive director of both the Extension Board and the Mission Board, to consider and approve the loans, based on criteria set by the directors.
“We’ll make the determination based on need,” said Stratton. “And the turn-around time will be five days or less.”
Virginia Baptists organized the Extension Board in 1940, anticipating a church building boom that followed World War II. Its loan fund has grown to about $16 million from the interest on loan repayments and from Virginia Baptist Cooperative Missions allocations.
The board’s loans, which are limited to a maximum of $500,000, assist congregations which are unable to secure full commercial financing.
Currently the board has 70 loans outstanding, totalling about $12.8 million.
“Not one of those loans is in default,” said Stratton. “In this economy that is a remarkable thing.”
This is Virginia Baptists’ second recent attempt to help churches impacted by the economic downturn. Earlier this year, the Virginia Baptist Mission Board established a Helping Hands Fund to provide financial assistance to struggling churches. The fund was created from a significant initial contribution by First Baptist Church in Richmond and has since received other donations.
Applications for the new Extension Board loans may be obtained from Kay McMeniman at the Mission Board. She can be reached at kay.mcmeniman@vbmb.org; at 2828 Emerywood Parkway, Richmond, VA 23294; or (804) 915-5000 or 1-800-255-2428.