Loans

You can trust the experts at Orchard Alliance to help your Alliance church or ministry choose the option that best fits your needs from the many financing options available. Unlike traditional commercial banks, we understand the unique challenges and needs of The Alliance. We care about the spiritual health of your ministry, and we want to see it thrive.

As you work to fulfill your unique God-given mission in service to the Kingdom, Orchard Alliance will provide practical advice for every stage of your project so you can concentrate on your ministry calling.

Finally, when you borrow from Orchard Alliance, your loan interest stays in The Alliance, providing returns to investors and funding other Alliance initiatives. We work together to do immeasurably more for Christ!

Standard Loan

• The term will typically be 20 years, although both shorter and longer terms are available without impacting the interest rate
• Unlike most commercial loans, there is no balloon payment – the amortization schedule aligns with the maturity date of the loan
• You may choose from annually-adjustable or fixed interest rate options
  • The adjustable rate is based on Orchard Alliance’s internal cost of funds, not a national index such as the “Prime Lending Rate.” This provides greater stability.
  • Three- and five-year fixed rate options are available, and after the fixed-rate period ends, your interest rate is subject to annual adjustment.

For more information, complete the form below or call 833.672.4255.

Fixed Payment Loan

Fix your monthly payment for the first ten years of your loan based on the initial interest rate and a 20-year amortization. A fixed payment amount simplifies budgeting and cash flow planning.

Fixed Payment Loan details:

• Your interest rate may adjust, but your payment remains fixed at the original amount for at least the first ten years of the loan.*
• The maturity date of your loan will be based on a 30-year term, although the loan will likely pay off sooner.
• Beginning in year 11, your monthly payment will be either 1) a fully-amortized payment that will pay off the loan by the 30-year maturity date, or 2) the original fixed payment amount, whichever is greater.
• Your monthly loan payment will be adjusted each successive year in this manner until the loan is paid off. At no time will the loan payment be less than the original payment amount.
• In the case of a construction loan, you will make interest-only payments until the final loan draw is taken, at which time the fixed payment amount will be calculated based on the actual loan balance and the original interest rate documented in your loan approval letter. The 30-year maturity date for the loan will be based on the time of the final loan draw.

For more information, complete the form below or call 833.672.4255.

* If your fixed payment amount is not sufficient to cover the monthly interest accrual, your payment will adjust to this higher amount until the interest rate decreases, allowing for a lower interest-only payment or the original fixed payment amount once again.

Small Unsecured (SUN) Loan

Choose a SUN Loan when your church or ministry needs an unsecured and streamlined financing option for amounts up to $100,000. Read stories and see survey results of others who have received a SUN Loan here.

SUN Loan details:

• Any church or ministry accredited or affiliated with The Alliance is eligible.
• Loan funds must be used for real property-related purposes including external refinances, purchases, construction, FF&E, soft costs, etc.
• SUN Loans may not exceed $100,000.
• Terms are available from one year to ten years.
• Interest rates are annually adjustable and set by Orchard Alliance.
• SUN Loans have no prepayment penalty.
• You may only have one active SUN Loan at a time.
• You may apply for a SUN Loan if you currently have a secured loan, subject to the following:
  • Monthly payment on the SUN Loan must be made prior to monthly payment on the secured loan.
  • The SUN Loan cannot be used to cover construction cost increases on a project currently funded by an Orchard Alliance loan.
• Your property may not be encumbered by an existing lien from another lender.
• Encumbrance of borrower’s property subsequent to SUN Loan approval will constitute an act of default on the SUN Loan.
• Any existing secured loan may not be refinanced into a SUN Loan.
• All funds are to be disbursed in a lump sum after receipt of signed loan documents. Borrowing increases involving a SUN Loan must conform to the following standards:
  • The balance of a SUN Loan may be increased but may never exceed $100,000.

To submit a SUN Loan application, click the button below. For any other questions, complete the form below or call us at 833.672.4255.

Line of Credit

Orchard Alliance provides lines of credit in two forms.

Companion Line of Credit

A “Companion Line of Credit” is tied to a new or existing Orchard Alliance loan, other than a SUN Loan, and the amount available is based on the original loan amount.

Terms:

1. A Companion LOC will be limited to $100,000 or 10% of the original amount approved for the companion loan, whichever is less.
2. The LOC will bear the same interest rate as the companion loan plus 25 basis points (0.25%).
3. The LOC will carry the same maturity date as the companion loan.
4. The LOC may not carry a balance for more than 47 consecutive months and must maintain a $0 balance for at least 30 consecutive days to reset the 47-month countdown.
5. The borrower must make monthly payments of all accrued interest.
6. Payments to the companion loan will not be permitted unless the LOC is current.
7. The LOC will terminate as soon as it has a $0 balance after repayment of the companion loan. Any outstanding LOC balance must be repaid before OA will satisfy the security document of the companion loan.
8. A borrower with an existing loan may apply for a companion LOC at any time. The size limitation of such an LOC will be based on the original amount approved for the companion loan.

Independent Line of Credit

An “Independent Line of Credit” is for churches that do not have a regular Orchard Alliance loan, or that would prefer a line of credit that is not tied to another loan.

Terms:

1. Independent LOCs will be limited to $100,000 or 10% of the most recent year’s operating income, whichever is less.
2. The interest rate will be adjustable monthly and set at the OA Base Rate (the “index” plus 350 basis points (3.50%).
3. The term will be 12 years.
4. The LOC may not carry a balance for more than 47 consecutive months and must carry a $0 balance for at least 30 consecutive days to reset the 47-month countdown.
5. The borrower must make monthly payments of all accrued interest.

For more information, complete the form below or call 833.672.4255.

Estimated Loan Payment

Your church’s new loan will create a variety of ongoing expenses. Foremost among these expenses is the monthly loan payment.

Use the calculator below to calculate your estimated loan payment in advance, so you can count this cost and plan accordingly.

Please call 833.672.4255 or complete the form below to contact us about interest rates.

Planning for Other Expenses

Depending on the scope of your project, your church’s loan could also result in increased utility costs, increased maintenance and replacement expenses, and increased property/casualty insurance costs.

• Estimate utility cost increases by accounting for the increase in square footage as well as any increase in potential facility usage throughout the week.
• Contact your insurance company for a quote to estimate property/casualty insurance cost increases; they will need property information related to your project
• Estimate your ongoing maintenance and replacement expenses using this planning tool:

Fundraising/Capital Campaigns

As you count the cost, especially a monthly loan payment, it may be in your ministry’s interest to pursue fundraising. If so, Orchard Alliance recommends the services of Steve Johnson at Stewardship Journey Consulting. Steve specializes in church capital campaigns and has helped numerous Alliance ministries meet or exceed their fundraising goals. You can connect with Steve at (763) 294-1814 or [email protected]. Be sure to tell him you are an Alliance ministry and were referred by Orchard Alliance.

Taxable Income

Does your church or ministry receive income from any source other than charitable contributions? If so, some or all of that income may be taxable. The IRS is concerned with how your income is generated, regardless of whether it is ultimately used for your tax-exempt ministry purpose.

If your ministry receives income from any source other than charitable contributions, use the Church Management Guidelines document from the C&MA’s Office of the Corporate Secretary to determine whether or not you may have an unrelated business income tax (UBIT) liability.

Important note: choose “enable macros” as you open the spreadsheet. The decision matrix linked to above is designed to provide accurate information for C&MA churches and districts in regard to the possibility of unrelated business income. This tool is provided to assist a church or district in making a preliminary finding and is not intended to encompass all applicable laws and regulations. Because the response to each question must accurately reflect the circumstances of a specific scenario, there is no guarantee that the results obtained will always be completely accurate. It should be understood that the provider of this decision matrix is not engaged in rendering legal, accounting, tax, or other professional services. Once a conclusion is drawn from the decision matrix, it is strongly recommended that the services of a competent professional be sought.

Important Information for Districts

As district leaders, your involvement in the loan approval process is essential. The District Executive Committee (DEXCOM) must endorse every new loan in your district. Before any new loan is sent to DEXCOM for consideration, you should discuss and verify the loan amount with the borrowing church and/or Orchard Alliance. You may contact us directly at any time to request a list of current loan applications from churches in your district. For some loan requests, especially those involving construction, a loan amount higher than the initially requested amount may be necessary.

Additionally, an assessment and formal recommendation from the borrower’s district superintendent is required as part of the application process. Districts can access and download these forms here:

• District Endorsement and Commitment
• District Superintendent Assessment and Recommendation

District-Specific Products

In addition to our more accessible loan products, districts may also apply for products that are designed to help them meet unique financing needs on behalf of their churches.

• District Line of Credit (LOC) – Provides up to $200,000 of “as needed” property funding for districts and their churches.
• District Land Purchase (DLP) Loan – Helps districts acquire strategic real estate for future use by an extension church or church plant.
• District Church Restart (DCR) Loan – Allows districts to leverage property equity to fund church redevelopment efforts.

District Land Purchase (DLP) Loan

At times, as an Alliance district, you may have the opportunity to purchase property for a future church site before the congregation has the ability to assume the monthly loan payments. While Orchard Alliance does not participate in land speculation when the appreciation of land value is a necessary condition for the repayment of a loan, you may apply for a district land purchase loan under the following criteria:

• The property under consideration must be unimproved. (Improved property will only be considered as long as the improvements add no significant value to the property.)
• The church body for which the property is intended must be an extension church. If this is unclear, the Orchard Alliance board of directors will determine whether or not the church in question should be considered an extension church.
• The church body for which the property is intended must already be in existence and worshipping together.
• You must demonstrate that the property is in a prime target area for the church.
• Similar property should not be readily available, due either to escalating prices or to lack of other vacant lots; or the property should be demonstrated to be significantly underpriced.
• You, as the district, must have 25 percent equity in the property. If you are not able to provide a cash down payment of at least 25 percent, other debt-free district property may be used as collateral.
• You, as the district, agree to accept full responsibility for monthly loan payments.
• All existing Orchard Alliance loans to your district, or for which the district has guaranteed payments, must be current.

For more information, complete the form below or call 833.672.4255.

District Church Restart (DCR) Loan

One of the challenges that districts face is what to do with congregations that are slowly dying. In many cases, these congregations have little hope of returning to their original health without extreme intervention; however, they often have facilities that are very strategic.

Districts can often take advantage of the strategic facilities by closing the church and, after a time, reopening the church with revamped ministries and new personnel. To do so takes a very large financial commitment from the districts to cover staff salaries and operating expenses for a significant period of time. There is tremendous efficiency realized when the equity in the building can be used to cover the operating expenses of the replant. The Orchard Alliance board of directors (BOD) may approve loans to districts for church restarts that include the funding of operational expenses. Such loans are subject to the following criteria:

• All requests will be reviewed by Church Ministries of the C&MA before being presented to the BOD.
• Only the property of the church being revitalized may be used as collateral.
• Loan-to-value (LTV) should not exceed 50 percent.
• The property must be owned by the district and the loan must be made to the district, with all loan payments being pulled electronically from a district account.
• Underwriting should be similar to that for any other district loan.
• The loan may include funds to refinance debt that the former congregation owed.
• The operational expense portion of the loan may not exceed $400,000 or the total budgeted operating expenses of the revitalized church for three years, whichever amount is less.
• Loan funds will be distributed in one lump sum, and fully-amortized payments will begin immediately.
• A budget for the use of the loan funds must be presented with the loan request.
• Capital expenses that are funded through the loan shall receive a 15-year term and amortization. Operational and FF&E expenses shall receive a six-year term and amortization. If a loan includes a combination of these types of expenses, the loan may have a blended payment stream that combines these separate amortization schedules or it may be handled as two separate loans.

For more information, complete the form below or call 833.672.4255.

Self-Funding Rate Discount

Self-funding is a unique way to lower the rate on your church’s loan by encouraging church members who invest in Orchard Alliance to associate their investments with your church. It costs nothing and does not affect the return on their investment. But it can dramatically affect the interest rate on your church loan. Here are the steps:

1. Invest in Orchard Alliance investment certificates, IRAs, or Roth IRAs for a term of one year or longer.
2. Name your church on their investment application, allowing Orchard Alliance to associate their investment with your church’s loan.
3. Earn a fixed interest rate on their investment.

They earn interest on their investment, similar to what they would earn at a bank. On the first day of each month, Orchard Alliance calculates the weighted average rate of all the investments from the people in your congregation. The interest rate on your church’s loan will be that weighted average rate, plus 2.0 percent.* This is called “self-funding.”

Their investment is in no way “locked up” at Orchard Alliance because of self-funding. If they need to redeem their funds for any reason, they are available. (Standard early withdrawal penalties may apply. See the current offering circular for details.)

To learn more about Orchard Alliance investments, visit

To see a more detailed explanation of the self-funded interest rate calculation process, visit

If the total dollars invested in self-funding are less than the total balance on your church’s loan, Orchard Alliance will simply blend the self-funded rate with the standard loan rate proportionally based on the balance of the investments and the outstanding balance of the loan.