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Church Debt

There are instances where the church may need to incur debt. An example might be for a long-term purpose such as the acquisition of land or building or building renovations or expansion. There may be occasions where the need is of shorter-term such as to meet temporary shortfall in cash flow at certain points in time of the year. The debt policy of the church must adhere to any legislative rules and regulations and any restrictions in the governing documents of the church.

Government policy is that a church is allowed to borrow if the power to borrow is included in its by-laws.

For unincorporated churches, an important decision is whether or not to allow borrowing since the board members can become personally liable for any debts the church cannot pay.


Control of credit cards in the name of the church can be problematic in terms of control of use and access and obtaining supporting receipts in a timely manner. For that reason, it may be preferable for individuals to use personal credit cards and be reimbursed promptly upon submission of expense account statements.

Use of church credit cards should be limited and proper back up for purchases should always be obtained. Staff should not be allowed to charge personal expenses on church credit cards. Use of church credit cards held by staff should be limited to those who need to make payments on-line or away from the office.



It may be appropriate and necessary for the church to arrange a line of credit to fund temporary cash shortfalls. To reduce the risk, the church should only have one line of credit, the credit should be limited to a reasonable level, restrict access to authorized dual signatories and secure the credit with church assets if possible to reduce potential personal liability to members of the board.



The church may require long-term debt financing for capital projects. Depending on the amount required, it may be possible to obtain a loan through a financial institution without actually providing security against the property.

Generally, for capital projects such as the purchase of land or building or the expansion or renovation of the church building, larger amounts are involved, and it will be necessary to provide mortgage security, i.e. a charge against the church property. The church trustees can mortgage the property with the approval of the Society and Board of Administration of FMCiC.

Lending rates will not be competitive with home mortgages since the risk is higher due to the uncertainty of the church future revenue from donations.

FMCiC offers both a loan and mortgage program at very competitive rates. For information, contact the Director, Administrative Services.