The idea of ministry in a coffee shop has been around for some time now. The book that coined the phrase “Third Place” (“The Great Good Place”) was written by Dr. Ray Oldenburg before 1990. We (Cornerstone Knowledge Network) brought Dr. Oldenburg up over six years ago to get his thoughts on churches and third places. He had some compelling insights but the admonition that has stuck with me is, “Third place is not an opportunity for the church; it is a responsibility.” And third places are not limited to coffee shops.

I have a pastor friend, Dave, that has been trying to develop a ministry opportunity in the café around the corner from their offices. It’s a great opportunity but nothing has come together yet. In the midst of trying to make that work, God opened up an entirely unexpected third place:

Dave’s church sponsors a softball team that is made up largely of people that don’t go to church; actually, guys that won’t go to church. Recently one of the guys invited Dave to the local fitness center for a weightlifting fundraiser. He was happy to go but was extremely uncomfortable among the buff and brawn. He realized that’s how these guys feel when they visit a church. He shared this with one of the guys and they both realized how similar the feeling would be. Out of that conversation came the idea of meeting in a room above the fitness center (that Dave didn’t even know existed). Following softball season, they plan to meet there on Tuesday nights. Spiritual conversations in relational space. Very cool.

The coffee shop ministry may still come together but I’m glad he wasn’t so focused on a certain way of doing third place that he missed where God was working. I’m glad his creativity didn’t get in the way of God’s.

That’s never been truer than for the way churches finance capital expenditures today. Gone are the days when you could talk to your local banker and they would bend over backwards to make the loan work. Money is cheap but lending is tight. Capital remains constricted and there is reluctance on the part of many lending institutions to step out when they already have so many under-collateralized commercial loans. Cash is still king but cash flow is the emperor. Banks no longer rely on the pledge of funds and are requiring churches to have a 6 to 12 month history demonstrating the receipts of those pledges. And banks no longer assume the appreciation of real estate values so the Loan-to-Value Ratio (LTV) is more critical and will not likely be able to exceed 75%.

So what changes do churches need to secure the capital they need for expansion? Here are some key strategies financing under the new rules of the game:

1) Be clear: There has never been a more important time than now for churches to have clarity about their vision. The vision and mission must drive the decision as to whether or not new facilities are necessary.

2) Plan ahead: Begin now to develop margin between your income and expenses so you can demonstrate actual ability to carry debt. Even expenses you’re carrying now that you won’t need later can help. For instance, if you’re paying rent on facilities you won’t need when your new facilities are completed, that money can be used to amortize your new loan. NOTHING beats building for cash when you think far enough ahead.

3) Start early: Banks used to be impressed by what was pledged. Now they want to have six to twelve months evidence of the commitments so capital campaigns need to start earlier in the process.

4) Be prudent: It’s important to work with professionals that have adequate experience in serving churches. Missteps can be fatal to a building program. We continue to see projects abandoned because a church trusted a price from a builder or architect that turned out to be too low. At best it put them back to square one; at worst it killed the project and left lingering costs.

5) Consider alternatives: We are seeing an increase in churches funding their needs through bond programs. Bonds often carry higher initial fees but are less expensive for the life of the loan. Consider these and other alternatives for the one that best fit your comprehensive financial plan.

Money is not likely to ever be this cheap so it can be a great time to finance a building program. Use these strategies to move ahead successfully.