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First Baptist Church of Woodstock

Dr. Johnny Hunt, Senior Pastor
Turnkey Debt Placement

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Challenge

Having experienced well over a decade of explosive growth, this ministry faced the need to expand its worship capacity to accommodate a 7,000 seating capacity in one service. The resulting cost translated into one of the largest single ministry projects attempted, nationwide. The ministry's existing bank was enthusiastic about the project, but the loan size dictated that the bank spread the financial exposure. The bank agreed to put together a "lender syndicate" to fund the project, and showed significant commitment to the project by agreeing to hold approximately 40% of the loan amount. The bank put together an extensive "book" to market the merits of the project to regional lenders in the marketplace and to a lender with a national reputation for lending to churches. Despite the marketing, there were no commitments from other lenders. The lenders declined for various reasons, but these themes predominated 1) ratio analysis showed that the ministry was outside of "acceptable" parameters; 2) lack of a capital pledge campaign; and 3) project size. The project had to be put on hold.

Solution

The ministry hired SCG to find a financing solution that would permit the ministry to accept the fruits that God had blessed them with. SCG was familiar with the ministry and knew that they had a sound funding plan, so we focused on 1) getting an in-depth understanding of why the financing marketplace was not comfortable with the funding plan; 2) making minor adjustments to the funding plan; 3) making adjustments to the multiple lender package to make it more cost-effective for the ministry; and 4) developing an underwriting "book" that clearly mitigated the risks of the funding plan in language that could be understood by financiers.

Why it Worked

SCG's in-depth knowledge of financiers' limitations in understanding ministry financing allowed us to tweak the ministry's funding plan and improve the packaging of the loan. As a result, the ministry was able to…

  • Resurrect the project in its entirety and add approximately $2 million to the project scope.
  • Achieve significant cost reduction in the financing fees, while maintaining a favorable rate.
  • Most importantly, not compromise the strong beliefs regarding stewardship that drove the ministry's funding plan.


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