Church Loan Corp. marks 50 years

January 13, 2003

Church Loan Corp. marks 50 years
___By Ken Camp
___Texas Baptist Communications
___Fifty years ago, the idea of starting a loan corporation for Baptist churches not only was novel; it was a necessity.
___Texas needed more churches to reach the 1.5 million new people who had moved to the state in the previous decade. Those new churches needed buildings, and banks seldom provided loans to fledgling congregations.
___Out of that need, the Baptist General Convention of Texas birthed the Baptist Church Loan Corp.
___The Church Building and Loan Association--as it was initially named--started 50 years ago with $250,000 in temporary capital provided by the BGCT from reserve funds and a $4 million line of credit from the First National Bank of Dallas.
___The first loan granted was $13,650 to Oldham Memorial Baptist Church in Houston.
___Fifty years and about 2,000 churches later, the Baptist Church Loan Corp. is a $100 million lending institution.
___In five decades, through periods of inflation, recession, fluctuating interest rates and drastic changes in the financial services market, the corporation has provided 2,700 loans totaling more than $380 million to help churches buy land, build or expand facilities.

JERRY Carlisle (left), chairman of the board for the Baptist Church Loan Corp., is pastor of First Baptist Church of Plano. The corporation's president is Charles Pruett.

___A.B. White, pastor of East Grand Baptist Church in Dallas, served 17 years as the first president of the corporation. Don Singletary succeeded him in 1968, followed by Bruce Bowles in 1973.
___Through it all, the corporation's goal has remained the same, according to Charles Pruett, president and CEO since 1999.
___"Our objective is not to compete with banks. Our goal is to provide efficient, effective and affordable loans for Texas Baptist churches," Pruett said.
___During the last fiscal year, ending June 30, the Baptist Church Loan Corp. funded 76 loans totaling $22.5 million. Fourteen of those loans were for first-unit worship facilities of new churches.
___Currently, about 20 percent of the churches using the loan corporation's services are congregations less than five years old.
___Unlike other institutions that favor established, financially secure congregations over smaller churches with fewer resources, the church loan corporation makes the same offer to any church.
___"Whether they are a small inner-city church in Houston or a mega-church in the suburbs, they'll get the same rate from us," Pruett said. "Everybody gets the same interest rate."
___In some respects, the lending environment has changed significantly in the last couple years, and the loan corporation had to adapt to those changes, Pruett noted.
___"When the Baptist Church Loan Corp. was established, churches were virtually without options for credit," he observed. But with the growth of non-banking lending institutions, fluctuations in the stock market and changing prime-interest rate, banks began aggressively seeking church business by offering them fixed-rate loans at favorable rates.
___The loan corporation initially was unable to match the fixed rates banks offered, and some churches refinanced their loans with banks. Total loans outstanding with the corporation dropped from $101 million in 2000 to $92.6 million in 2001.
___However, the loan request slowdown was short-lived, and as of Nov. 1, the Baptist Church Loan Corp. had $98 million in loans.
___"We're able to offer prime less a quarter percent, and that's really attractive to churches now," Pruett said, noting a number of churches that previously had bank loans have refinanced with the Baptist corporation in recent months.
___But Pruett is quick to point out the BGCT is not in competition with banks. In fact, the loan corporation could not function without banks.
___"Institutional lending partners work with us to keep costs down," he explained. "They like doing business with us because we have an exceptional credit rating, and we collateralize all loans."
___Pruett encourages churches to be "good stewards" and seek the most favorable rates and terms available when they need financing. In some cases, that means going to a bank rather than the loan corporation.
___But he adds that when churches do business with the corporation, they can be assured their interest payments help build up equity to supplement loans for church starts throughout Texas.
___"All other things being equal, we do bring that to the table," Pruett said.
___

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