Speakers: Wayne B. Clark
Ed Simmons

This workshop was led by Wayne Clark, Director of Building Programs for the UUA, and his colleague Ed Simmons, who is the chair of the Congregational Properties and Loans Commission. They discussed the various loan programs available to congregations from the UUA and other organizations.

There were two main loan programs presented and explained by Clark and Simmons: the Building Loan Program and the Loan Guarantee and Grants Program. Congregations wishing to qualify for either program must meet certain criteria.

Building Loan Program

The UUA's building programs exist for the purpose of enhancing the growth of congregations - programatically and spiritually. Thus, there is a lot that an applying congregation needs to do to show that their long term growth will allow them to repay any loans the UUA may issue. Set-in-stone criteria, Clark said, include the following:

• The size of the loan must be between 50,000 and 500,000 dollars.
• The congregation must be a Fair Share congregation and must maintain that status throughout the extent of the loan.
• Before applying, the congregation must have built a capital campaign raising twice your annual pledges. This does not include endowment, fundraisers, or rentals - only pledge income.
• The Annual Debt Service (money paid yearly to service your loan) can't exceed 25% of the congregation's operating income.
• In a new congregation or extension congregation, a detailed long-term growth plan needs to be presented.
• An Environmental Phase 1 Survey must be conducted before building anything to make sure of what's in the ground. The UUA offers some surveying services.
• The congregation must meet minimal insurance guidelines so that the UUA has some assurance that disaster or other setbacks won't make it absolutely impossible for the loan to be repaid. The UUA offers a special insurance deal through Church Mutual.

The interest rate of loans is set at the time of closing and will be based on the 7-year treasury plus 2%.

Loan Guarantee and Grant Program

Clark noted, "It's fairly common for congregations to find a better deal locally, at a bank, and then come to us for a guarantee." A loan guarantee allows a congregation to obtain a better interest rate on a third-party loan. They are assigned on a very individual basis.

Applications

Both programs have a similar application process (the forms are available from the UUA at http://www.uua.org/building/). An important part of it is the Cash Flow summary/projection form. "When an application is submitted, please use this form and don't play games with it. I can't tell you the different variations that financial sorts use to try to do things differently." Clark suggested that the following data would be the ideal figures to have on the Cash Flow form:

• Pledges should show an increase from 0% to 5%.
• Gifts and endowments would, in a perfect world, show a 0% increase from year to year: endowments should not be used to balance operating costs.
• Fundraising should be no more than 5% of operating income, simply because they are so labor-intensive and inefficient. Note that canvasses and pledges are not including in fundrasing; examples of fundraising include things like Bean Suppers and Trash and Treasures sales.
• Rental of church space must match the congregation's vision and mission - you need to be renting to organizations that are sympathetic with your congregation's goals. Otherwise, you're a landlord, which is not the business of a congregation.
• Personnel, Administration, and Programming expenses should be 10% each of the congregation's annual expenses.
• Total expenses must balance your total income.

"When you think you might be interested in a loan or a guarantee, fill out what you can and send it to me," Clark advises. "I'd rather spend the time and energy reviewing a partial application and interacting 4 or 5 times with you than get your completed application on my desk with you expecting the money in a few days and then find out that there are a lot of things wrong with it."

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