Church Loans - Perspectives on Borrowing

By Almon M. Bartholomew

At the time of property purchase, new church construction, or building reconstruction, the question arises, "Is it proper for the church to borrow money?" Some feel the church should never be in debt. In most instances, however, this is unavoidable.

Any philosophy of borrowing, to be accurately formed, must be in the context of a larger consideration that embraces the whole milieu of stewardship, ownership, getting, giving, spending, and saving. An attempt to isolate the focus on borrowing alone introduces the possibility of bias or slanting.

Lending, borrowing, pledging (offering collateral), and returning of pledges became Old Testament practice. The laws regarding this are recorded in Exodus 22:25—27. Additional laws regarding release of the debtor by the creditor are outlined in Deuteronomy 15:1—15. Hence no exposition on these matters are included here, except the observation that lending and borrowing were not prohibited but were allowed in controlled circumstances. This does not suggest that borrowing is necessarily advisable but legitimate.

Psalm 37:21 does not teach it is wicked to borrow. Rather, it is wicked to borrow and not repay. Wickedness is associated with failure to keep an agreement-not to maintain an obligation.

Jesus said, "Give to him that asketh thee, and from him that would borrow of thee turn not thou away" (Matthew 5:42). Lending and borrowing are two essential components in this arrangement. If borrowing is evil, how then could lending be righteous? Would Jesus advocate one party entering into an agreement that encouraged evil participation of a second party? Hardly.

Some assume that because Israel was to be a lending nation as opposed to being a borrowing nation, a prohibition is associated with borrowing. Deuteronomy 15:6 and 28:12 seem to bear this out. Instead of a statement forbidding borrowing, it is a prophetic promise of prosperity in which Israel is promised strength and plenty, allowing it to become a creditor nation rather than a debtor.

Proverbs 22:7 becomes a proof text for some that borrowing should be a forbidden practice. In many instances the only collateral a borrower possessed was his own person. An example is found in 2 Kings 4: A woman appealed to Elisha when a creditor was about to take her two sons as bondmen. Curiously, Elisha asked her to borrow more empty vessels in preparation for a miracle.

We still need a miracle to pay some of our debts, but the scene is considerably different. It is not advisable to enter into an unsecured loan arrangement. Borrowing, if done at all, should be associated with collateral that exceeds in value the amount of the loan. With such a pledge, in my opinion, it is legitimate to become a borrower.

Some may feel Romans 13:8 relates to this matter, but it has nothing to do with lending and borrowing. The whole theme of Romans is justification by faith and not by works of the Law.

The first four of the Ten Commandments have to do with man’s relationship with God. The last six deal with man’s relationship with man. Jesus acknowledged this dual relationship (Matthew 22:37—40). In this demonstration of love toward God and our neighbor the Law is fulfilled according to verse 40. In fact, love will compel us to fulfill all our obligations to our neighbors whether financial or otherwise. Paul was not speaking to the matter of financial transactions but rather to justification. Justification comes by faith, is demonstrated by love, and more than satisfies the Law’s requirements.

I do not perceive lending and borrowing in the light of absolutes–right and wrong. Foolish borrowing and failure to repay certainly should be warned against. However, careful borrowing with sufficient collateral does not warrant scriptural prohibition.

As a matter of practicality, it may be better to arrange long-term financing of a church building project and get it done quickly than to stretch a program over many years, maintaining a state of incompleteness. Such programs can produce weariness and frustration that are more debilitating than debt and financial encumbrance upon a material asset. To be able to turn away from material and physical involvement and become involved in the spiritual outreach ministries of the church may indeed enhance growth.

My advice is always to pay cash as far as possible. Then careful, responsible borrowing and maintenance of the financial obligation are legitimate. I find no scriptural prohibition to such.

Each of us is inextricably bound by debt. We have not yet reached utopia and must continue to pray, "Thy Kingdom come."