Why Your Church or Agency Should Choose GUMF for Your Loan
The Loan Program of the Georgia United Methodist Foundation (GUMF) delivers advanced faith-based lending solutions that elevate the mission of and ministry of your United Methodist church or agency.
In a recent video, Mathew A. Pinson, GUMF president and CEO, and Jim Pope, GUMF senior advisor to the president and director of lending, explain why your church or agency should choose GUMF for your loan.
Play Video or read transcript below.
Mathew: Hi friends, I'm Mathew Pinson, president and CEO of the Georgia United Methodist Foundation. I'm thrilled to be here today with my colleague, Jim Pope, who's the director of lending here at the Foundation. Jim brings 40 years of experience in banking to this work here at GUMF. Prior to joining the GUMF team, Jim was the founding executive of KeyWorth Bank and then the chairman of the southeastern region for Renasant Bank. Jim has become a great friend and is an exceptional colleague, and he and the team here at the Foundation bring a particular expertise to our Loan Program. It's that expertise that Jim and I will be talking about today, and I look forward to this conversation. Thank you for being here.
Jim: I appreciate that very much.
Mathew: Jim, what makes our Loan Program exceptional, and why should our Methodist congregations and agencies always come to GUMF first when considering a loan?
Jim: Thank you, Mathew. I think the main thing that I feel is that we're here to help churches with their mission and ministry in the communities they serve. Banks don't always think that way. Anything that we can do to help a church grow and expand its ministry, that's what we’re here for. Now, many times it’s facility projects that they need to have some assistance in and building facilities so they can expand those ministries.
Mathew: In what ways is GUMF’s Loan Program different from a loan program offered through a bank?
Jim: Some of the features of our Loan Program that make us very unique from traditional banks, it's because we're a nonprofit. We are not required to charge intangible tax. Banks are required to charge that. For example, intangible tax is $3 per $1,000 so on a $2 million loan, that would result in a $6,000 charge that you would face at the bank that you would not face at the Foundation.
We have no balloon payments meaning that often banks will extend a 15- or 20-year loan, but they'll have a maturity at the end of five or 10 years and so you've got to refinance and pay all those closing costs. Again, we do not have balloon maturities with our program.
We also have no prepayment penalties. Often the church will receive a contribution or have a capital campaign, and they want to use those funds to pay down their loan. We encourage that. Banks often will charge a prepayment penalty for paying a loan early.
We offer up to 20-year financing. We fix the rate for five years and adjust the rate each five years based on the market. And if a church wants less than 20, obviously, we will accommodate that.
We generally have no appraisal requirements. We can use the county property assessed value to determine the loan to value. In some cases, we need appraisals, but most of the time, no appraisal is required.
We do not charge any points or fees for our loans, only standard attorney closing costs are what’s paid, and you would pay that at a bank as well. We feel like these features make us unique and different from the traditional bank loan as well.
Mathew: That's exceptional. Great.
Mathew: Jim, what is involved in the loan process, and how long does it take to complete it from start to finish?
Jim: Well typically, what we do is receive a call from a church, and they want to discuss our financing program and a project that they have in mind. Some of the projects that we often assist churches with would be new construction for new facilities. Some of the other things is renovation and remodeling. Often, we'll get requests to assist with a new roof or repave a parking lot or expand a parking lot. Sometimes they want to update their HVAC or their sound system, their security system, or their lighting system. So, it's a variety of purposes that we get requests to help churches with their facilities. We will discuss that with them in detail.
We'd generally require that they go ahead and send us their financial statements. Generally, the past two fiscal years and any interim financial information they have. We'll also send them an application, which is to be completed and returned to us. Once the application is completed and returned, we present it to our loan committee for approval and once approved, a commitment letter is sent and once it's accepted, then we can begin to schedule the closing with our attorney. I would say the process could take anywhere from 30 to 60 days if everything moves along well.
Mathew: Jim, what is the most common challenge you observe when a church or agency is working through the loan process?
Jim: Well, when we send an application, it has several components to it. It has a section where the church provides its history and its mission. There's a financial section to the application, and then there's a section to explain the project and the cost that they are considering and want to borrow for. What I recommend is that they establish a committee and a point person on that committee to assign different people on that committee or in the church the responsibility for completing that section of the application. That point person then can gather all that information, complete the application, and resubmit it to us. And with the receipt of that application, the process begins to underwrite the loan and approve it.
Mathew: Jim, what inspires you about the GUMF Loan Program and is there a particular story you always think about when you work with a new client?
Jim: Absolutely, there are a number of stories. One that comes to mind is that we got a call from a church. They were using a bank for their financing, and the loan they had had a balloon. It had a maturity coming up. The bank had spoken to them, told them that they were reducing their exposure to church lending, and wanted them to pay the loan off. So, they approached us. We reviewed the loan, the application. We were able to approve that, give them a 20-year amortization with lower payments at a better interest rate. And they were very pleased. We were glad to help them in a situation like that.
Mathew: From your point of view as an expert, what are your observations about the current loan market, and what are topics that you think leaders in churches, lay and clergy, should be thinking about as they consider a loan of any kind?
Jim: In the current market, costs are increasing, which may require more capital. It's important they establish a knowledgeable committee in the church to look at their project to identify those costs, get with their contractor, and make sure that they understand all aspects of that, and the requirement to have sufficient revenue to service the loan. One of the things that I would encourage churches to do is always have extra reserves for times when revenue may fluctuate.
Mathew: All of this elevates mission and ministry in the local church.
Mathew: And you're facilitating that every single time you work with a church on a loan, and I'm grateful, Jim, for your work.
Mathew: What's the best way for people to be in touch with you and our colleagues here at the Foundation about our Loan Program?
Jim: Well, we are available. Lori Tucker, that works with me, is available. I'm available. So anytime a church has an idea or a need or wants to talk about it, please call us. We're more than happy to discuss the program, how it works, the different types of loans that we make. And many times, it's well in advance of a project, but we're happy to give them counsel and advice along those lines because we want to see them grow and prosper.
Mathew: Jim, thank you for making time for this conversation today, and thank you for everything you're doing here at GUMF to elevate our Loan Program and enhance the mission and ministry of the churches we serve across the State of Georgia.
Jim: Well, Mathew, thank you. I feel blessed, and we feel like we're assisting the churches in a proper way.