Managing Finances to Thrive Through Crisis

There are many emails and webinars being shared during this time, and we hope not to add ourselves as just another voice among the masses. We hope that the information shared here will be a very practical help to you from a financial and real estate perspective. We also want to be sure that you consult with your attorneys, CPAs, and experts before making any decisions. 

Amid a season of confusion and radical adaptation, we first want to share that we have been blown away and encouraged by how the Lord is moving through the local church. We are hearing story after story of churches experiencing record attendance for their online services, consistent giving, and true stories of life change as the church solidifies itself as the place of safety, hope, and purpose during a tragic and difficult time. We will continue to pray for you as leaders that Jesus will come in unexpected ways to the communities you are serving, and that He will continue to empower His Church to bring hope to a dark world. 

Money to carry on during disruption. Sources you may not have thought of:

Business Interruption Insurance
In most insurance policies, there is a clause that covers business interruption, which is specifically provided in cases where businesses experience a loss of income (tithes and offerings) due to a disaster. In almost every case, a pandemic would qualify as a disaster. 

The pushback that some insurance companies are using to refute this is that assembly wasn’t banned, it was limited. This is obviously a workaround on their part, but if you have experienced an interruption in income due to the pandemic, this is the time to explore utilizing the insurance you pay so much money for. The Ministry Solutions Team has pointed this out to some churches that we are working with, and much to their surprise, they found that they were covered. Every policy is different. We urge you to reach out to your insurance provider and learn about your coverage and how to file a claim. 

Force Majeure
For those of you who are currently in a long-term real estate lease, this is very important. Force Majeure is a clause that is typically written into every real estate lease that excuses the tenant from having to perform if the business has been interrupted due to reasons outside of its control. It’s typically written for natural disasters, but a pandemic certainly would qualify as an interruption outside of the tenant’s control. This would allow you to suspend lease payments on the facility until the assembly ban is lifted. 

Loan Modification
We are hearing that a lot of banks are "checking up on" their current church borrowers to see how they are performing. Have your numbers for online attendance ready, and tell the story well. The banks want nothing less than to have a mass of delinquent loans during this crisis. If you are experiencing a cash flow pinch of any kind, or just want to prepare yourselves for the coming months, your bank would likely be very happy to provide you with a temporary modification to interest only payments versus principal and interest until this assembly ban is lifted. Or, they may even be willing to capitalize the interest, which means adding the payments to the balance of the loan, in lieu of taking monthly payments. For most churches, this is thousands upon thousands of dollars in monthly savings. 

CARES Act
This may be the biggest piece of news on this subject. First, this is not the Disaster Relief Act, which specifically excludes churches and nonprofits. The CARES Act, which was approved by the Senate and House last week, is intended to stimulate any business with fewer than 500 employees, which includes everyone reading this email. In short (but we recommend reading in full), it will provide a fully government-guaranteed loan equivalent to 2.5X the amount of a small business’s monthly payroll, mortgage, rent, benefits, utilities expenses, etc. If the small business does not lay off or furlough its employees this year, then the loan is forgiven to the amount of costs spent in the eight weeks following the origination of the loan.