When Church Debt Is Overwhelming

What do you do when your church is in debt? Now I am not talking about just a little debt, but what do you do when you are carrying a debt load that is stifling? This is a heavy weight church leaders bear needing wisdom to successfully navigate. 

First, let’s define a heavy debt load. When a church possesses a long term debt of 4x times or more its annual income this is cause for significant alarm. For sure, when a church has a debt load of 3x its annual income things can be tight for an extended season. However, when a church is at a debt load of 4x or higher it can seem insurmountable. On more than one occassion I have assisted a church with a debt load up in the range of 10x its annual income. So this blog is not about the pressure felt by a manageable debt that feels bad, but an extreme debt load that feels stifling.

Here is how I would handle an extreme debt load:

  1. Get a proper perspective. Paying off this debt will not happen overnight. It is a long term journey and quite honestly should not even be a discussion point in terms of a short term goal. Rushing to a campaign to pay it off or putting pressure on your people financially is not the choice to make.
  2. Maintain a good relationship with your lender. This is key to reducing the feeling of pressure. Do everything within your power to keep your bank at ease with your current reality. The more open and healthy your relationship the better. It is both a testimony along with a step towards a positive future. Flexibility on their part will be extremely helpful to you so serve them as best you can.
  3. Stay focused on the mission of the kingdom. Debt repayment should never be the vision of the church. God is still in the business of reaching and discipling people. The gospel is as powerful as ever and your church can be an active part of the mission. Maintain a focus on the church being the church.
  4. Create an above and beyond giving channel for visionary causes. Your church budget is most likely extremely tight which means missions, ministry, programming, and staffing costs are very lean. However, people still want to give above and beyond resources to a meaningful cause. We do it all year long, oftentimes to nonprofit organizations in our community that ask. So let’s ask people to advance the vision. Here are visionary causes that people enjoy supporting.
    • Next Generation
    • Local Outreach
    • Global Missions
    • Capital Improvements

When you allow people to give to causes like these it will create several positive outcomes. You will gain new revenue to support many items that may have been eliminated from the budget. It can help you reach more people which causes church growth. The gifts for capital improvements can provide the revenue for future maintenance and repairs. Finally, above and beyond giving creates a vision for the future which keeps people from focusing on the debt.

  1. Focus your expenses toward growth producing items. Not every expense in a church budget or calendar results in growth. Use this season to focus your church resources like never before on reaching people. Resources include finances, facility, and people energy. Do not waste a minute or a penny.
  2. Finally, create margin where you can. Make every effort to renegotiate your repayment terms repeatedly. Even getting small wins can help for a season, like interest only payments for a year. Consider outside revenue generators like renting your facility, selling a portion of your property, or engaging new kinds of giving. Did you know that 90% of our personal wealth is contained in our assets? In other words, our stuff is more valuable than our bank accounts. Your people can generously contribute items like jewelry, art, cars, boats, real estate, securities, collectibles, even unused gift cards. (Generosity by Lifeway will receive these items on your behalf, liquidate them for you, and pass on the proceeds to the local church.)

No one likes debt, especially the kind that seems insurmountable. However, I want church leaders to have hope. Do not turn being debt free into a god. The King of Kings is still in charge and His mission is always viable. Be wise, be hopeful, and advance the kingdom. Go unleash giving today!

Some think the next generation is giving less than generations before them. The reality is they are just giving in different ways. Download our free ebook Next Generation Giving is Here.