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To help you understand SCG processes and services better, here are our answers to some questions we're frequently asked. We hope you'll also take the time to look at our Case Studies and Client Testimonials - our clients will vouch for these responses.

Please send us your question. Others probably want to know also.

We have bankers, accountants, and generally "sharp" business people involved with our ministry, either on committees or as vendors. Why should we consider SCG services?

There are other loan brokers assisting ministries with financing, and we have bankers on our team. What benefit does SCG offer?

Why do we need another planning process? We have planned projects before, and have been successful in attaining financing.

We have lenders knocking at our door, saying they can give us what we need. Why do we need SCG?

The lenders have the money we need. Don't we have to listen to what they tell us if we want to get financed?

What type of information do we need to have for SCG to be able to do a Strategic Financial Plan?

We have bankers, accountants, and generally "sharp" business people involved with our ministry, either on committees or as vendors. Why should we consider SCG services?

It's true that every ministry SCG has ever touched, and will touch, has valuable intellectual capital available within its staff, its vendors and its lay leadership. Our clients represent all levels of financial sophistication, including some acknowledged by their peers as being at the top of the "church industry" in practices and results. Even these clients consistently agree that SCG's perspective is different from what was available to them, and the SCG viewpoint has become a key component in finding, or sticking to, the path most congruent with their vision.

We believe the perspective we have gained over two decades of working daily with ministries - initially with only a financier's goals and later expanding to include the ministry's beliefs - is unique. We have learned that one size does not, in fact, "fit all" and we have learned to tailor our processes to meet each ministry's individual needs.

In addition, our Strategic Financial Planning Process (SFP) is both innovative and effective. Although many use the words "strategic" and "financial planning" to describe what they do or what they provide, we have yet to find a ministry, outside of our clients, or any other vendor that has implemented a process encompassing the major characteristics of our SFP.

There are other loan brokers assisting ministries with financing, and we have bankers on our team. What benefit does SCG offer?

Most brokers will take any loan request to a financier. These brokers ask for information, bundle it - in the same format you gave it to them - with a cover letter, and forward it to every financier they know. Most often, the cover letter simply says: "This is XXX ministry and they want to do XXX. What can you do for them?" This is not much different from the approach that most ministries take on their own.

Technically, SCG can be seen as a broker because we act as an intermediary between the ministry and the financiers. Functionally, the difference is that we take debt placement engagements only after performing due diligence to confirm that the funding request is viable and that it will meet the ministry's objective for the current project without inhibiting the ministry's ability to fulfill its vision.

Once SCG takes on a debt placement, we analyze the information we gather and discuss the structures that may meet your needs. Only after we agree on an optimal structure do we proceed with acquiring the financing. At that point we develop a complete underwriting package - similar to the documents we prepared as lenders. That detailed package says: "This is XXX ministry. This is what they want to do, and why it will be beneficial for them to accomplish it. These are the major risks inherent with this financing request and how they are mitigated. This is how we want the loan to be structured, and why it makes sense for the bank and the ministry to do it this way." We then stay with you throughout the negotiations and documentation stage to ensure that you end up with what you agreed to buy.

This view of financing as a "process" rather than a "transaction" improves the ministry's chances for approval with optimal financing structure and competitive pricing. And we know this process works - we have a 100% attainment record with our Turnkey Debt Placement service! Ask those brokers what their attainment record is.

Why do we need another planning process? We have planned projects before, and have been successful in attaining financing.

One of the major challenges facing a high-growth ministry is progressive escalation of costs as the ministry moves through phases of site development. The costs of later development stages require a different kind of planning.

Many ministries succeed using typical methods in the first few development phases because the difference in the costs of these phases is not large. But every high-growth ministry comes to a stage where the cost increases for each succeeding phase are quite large. This often happens in the third or fourth phase of a master site plan, when ministries are attempting to develop their permanent worship facility. For these later phases to be successful, a different kind of preparation is critical. Unfortunately, most ministries don't realize this until expectations have been set and significant amounts of monies have been spent.

The SCG Strategic Financial Planning Process reveals the ministry's challenges early in the planning cycle. That gives the ministry more time to respond, which minimizes the impact on the ministry's programming growth. Also, early visibility of late-stage requirements gives the ministry a good idea of the scope of work that will be feasible at any point in time, which allows a more cost efficient design process.

We have lenders knocking at our door, saying they can give us what we need. Why do we need SCG?

First, remember that these lenders are trying to sell a service or product. When they knock on your door, their goal is to get the ministry excited enough to give them a loan request. Second, the banking industry has changed so rapidly over the past decade that the person communicating with the ministry may have no actual underwriting experience. They may think your opportunity is appealing, but the real decision-makers are the people "back at the bank," whom you never meet. They may not even reside in your city or state, and to them, you're just another loan.

Most lenders do few ministry financings per year, so they really don't understand how varied ministry funding plans can be. When credit-risk questions come up, they don't know how to mitigate the concerns. This can result in being turned down or told you have to reduce the loan or the project scope - even if all previous communication has been extremely positive.

In addition, all lenders - even those more experienced in ministry financing - deliver products that have been developed with secular companies' needs in mind. While much effort goes into reducing the probability of default, very little time and effort is given to finding a structure that minimizes the effect on ministry programming and growth.

The principals at SCG have been involved in over $650 million in church financing, the bulk of that as a lender. In addition, we have acquired $165 million in financing on behalf of ministries. This extensive - and very specific - experience is unique, and it gives us valuable insight into the lender's perspective. We leverage that insight for our clients' benefit in a way no simple broker transaction can match.

The lenders have the money we need. Don't we have to listen to what they tell us if we want to get financed?

Yes, the lenders have the capital your ministry may need to implement its vision. And, it's their prerogative to decide how to employ that capital, so we can't be naïve and believe that their viewpoint is of no consequence.

However, SCG strongly believes that a ministry should first look within itself and decide on priorities that balance its capital and programming needs. Once the ministry understands the implications of its priorities and accepts them, the ministry can adopt a financial track congruent with its vision.

The next challenge is to understand what gap, if any, exists between this financial track and the lender's perspective. Once that gap is understood, one can effectively communicate to the lenders why the gap should be bridged by having them move towards the ministry's position.

At SCG, we have found that many times, even if a ministry has a good understanding of the financial risk associated with a project, the ministry does not have a good understanding of the perspective lenders will have. Because of this the ministry fails to communicate the funding plan in a way that is readily understood by lenders who are used to dealing with secular companies, and whose only concern is reducing repayment risk.

The typical result is that the gap is bridged by having the ministry move toward the lenders' position. The loan request is turned down, or is approved but reduced. When this happens, the lenders - not God's blessings - are driving the vision.

Even if the loan is approved, it may present the ministry with still another challenge. Because repayment risk is the lender's sole focus, they may not understand that the debt load might leave the ministry unable to add or expand programs, add staff, or continue infrastructure growth for years to come.

SCG's Financial Planning Process quantifies the cost to ministry programming so ministries understand the implications of their vision. That lets the ministry find its balance, a task that no one else - including SCG - can truly do.

What type of information do we need to have for SCG to be able to do a Strategic Financial Plan?

The ministry should define the key components of their future vision, including major programming needs and capital needs. They should give some thought to the number of phases, cost of each phase, and the timing of the phases.

Some of our clients start with just an idea of this information. Others have Master Site Plans defining each phase and its key components, and have architects' projections of the potential cost of each phase. Sometimes our clients use estimates because they are trying to determine the scope of work that is feasible for each phase. That reduces the risk of wasting money designing buildings the ministry can't afford.

Obviously, the better the information, the more likely it is that the plan will not change substantially in the future.


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