What you don't know CAN hurt you

I had an interesting conversation with a banker who specializes in church loans. Knowing ahead of time that he is a banker with over 20 years experience doing loans for churches, I knew that I would find the conversation interesting. We talked about a variety of matters, but he said a couple of things that really stood out.

The first statement he made that really stood out had to do with loan brokers. He told me that bankers are generally skeptical of loan packages brought to them by a loan broker. In fact, they insist that the actual application package be delivered to them directly by the church. They don't want the church to have "plausible deniability" about the veracity of the content of the loan package. They never want a church to be able to say, "We gave the broker our numbers, but he must have changed them before he gave them to you."

The second statement was almost as startling to me. "If a church can't produce their own internal financial statements, we won't do their loan." This was startling on a couple of levels. First, the implication that there are churches (and probably a surprising number of churches) who cannot produce an internal financial statement astounds me. It also saddens me. Second, I was impressed by the insightfulness of the bank to recognize that the inability of a church to produce its own financials is a likely indicator that the church will not have the sophistication it needs to meet the long term obligations the loan.

Tell us about your banking experiences. What insights has your banker given you? Has your church ever been turned down for a loan? What were the reasons? What sorts of stories have YOU heard from bankers? What interesting stories have you TOLD your banker?

Let's talk about banking. We'd love to hear your thoughts.