Update: The foundation elected Aug. 6 to extend the interest-only relief option until Dec. 31.
It wasn’t just getting the offer to pay interest only on its Development Fund loan with the Florida United Methodist Foundation that impressed the Rev. Dr. Mark Charles, senior pastor at Memorial United Methodist Church in Fernandina Beach.
What he will always remember is that the foundation reached out first to help the congregation deal with the financial crunch caused by COVID-19.
“We had a lot of uncertainty about how to pay the bills when the shutdown began,” he recalled. “Then came the email from the foundation offering one way to ease our minds. We were so grateful.”
To Memorial, it meant the normal $11,600 monthly payment on its loan was reduced to $3,400 for a three-month period beginning in June. At that time, there were great expectations the coronavirus would run its course by early summer.
But with the pandemic showing no signs of slowing, especially in Florida, the foundation last month decided to extend the interest-only offer through August or even longer if churches need further assistance.
Memorial, with an average attendance of about 550 for its three Sunday services, is one of several churches that opted for the extension.
“This generous offer gave us some breathing space and solid ground in this season of uncertainty,” Charles said.
While the church applied and received federal funds through the federal Paycheck Protection Program (PPP), those funds can only be used for a specific purpose.
The foundation’s interest-only option, on the other hand, temporarily freed up Memorial from a heavier financial burden, allowing it to continue its weekly feeding ministry and other programs that may have been endangered.
Andy Craske, the foundation’s vice president of loans and investments, says the foundation typically makes the interest-only option available to loan holders during emergencies. In Florida, that usually means weather-related calamities like hurricanes and tornadoes.
But at their meeting in March, board members recognized that COVID-19 could be every bit as damaging as a natural disaster and affect every church in the conference.
It’s been a welcome relief, Craske says. To date, 66 churches — representing 68 loans — took advantage of the program. In total, the foundation oversees 179 loans, which means there’s nearly 40 percent participation in the interest-only option.
Four churches used the option for the first three months, with another four scheduled to drop off Aug. 1. The remainder will return to regular payments of both principle and interest in September.
“With the foundation, we know it can be flexible in helping us get through tough times. You feel like you’re part of a team and they are very much invested in our survival and in our success.” — Arch Johnston, Community of Hope (Loxahatchee Groves) executive director of church administration
But that’s not set in stone, Craske says.
“We’re going to continue to monitor the situation,” he said “And if the situation requires it, we’ll go for another blanket extension. If not, we will consider churches on a case-by-case basis if they need more time.”
For St. Paul’s United Methodist Church in Ocala, the three-month option was enough to get the church through uneasy times. Its payment, normally $2,071 a month, dropped in half to $1,050. No one had to be laid off or furloughed. That included the staff at the preschool, even though no tuition was collected.
John Bendall, the church’s treasurer and accountant, says St. Paul’s had a lot of positive factors in its favor: PPP funds, a healthy online giving response and a “congregation that stepped up” and kept the church on strong financial footing.
“We’re in good shape and decided we could resume our regular payments for now,” he says. “Plus, if we keep deferring the payment, we’ll have a bigger balloon payment at the end of our loan. This was the right thing to do.”
Like Charles, he appreciated that the foundation reached out with the offer first and made the process very easy.
“All we had to do was sign the form, and it was done,” Bendall says. “Trust me, it never goes that smooth with a bank loan.”
Even larger churches, with more resources and deeper reserves, were at risk when coronavirus triggered a statewide shutdown.
Community of Hope United Methodist Church in Loxahatchee Groves, with an average weekly attendance of 2,200, is in a growth spurt — which was not hindered by the onset of COVID-19. It operates a second campus in West Palm Beach, and recently, despite the pandemic’s surge in south Florida, just opened a third branch in Lake Worth.
When a 10-acre property next to the main campus became available, Community of Hope took out a $4 million Development Fund loan from the foundation with plans to add additional buildings sometime in the future. That hefty investment leaves the church with a monthly $27,744 payment — cut to $14,580 by taking the interest-only option extension to August.
With the PPP assistance and the foundation’s help, the church was able to maintain its staffing, keep up with its bills and continue its ministry and outreach efforts. That includes an online Vacation Bible School and its partnership with Feeding South Florida, which to date has distributed food to more than 55,000 families at the church’s site.
“Even though our members have been very consistent and faithful through all of this, the giving hasn’t been quite what we had projected it to be before the virus hit,” said Arch Johnston, executive director of church administration. “So, with this help, we got the little cushion that we needed.”
Not having to skip a beat has paid off in these uncertain times. Johnston says Community of Hope has welcomed 35 new members to its congregation in recent months.
“And these are people who have never stepped in our building,” he said. “This is proof that the work of the church goes on and is so needed, even more so when the circumstances are so difficult.”
“All we had to do was sign the form, and it was done. Trust me, it never goes that smooth with a bank loan.” — John Bendall, St. Paul’s United Methodist Church (Ocala) treasurer/accountant
Johnston says the interest-only option is just one of many reasons to continue doing business with the foundation. Those who oversee investing funds and awarding them to churches are proven industry professionals who bring expertise and experience to the table. They also provide a personal touch to the customer service by establishing relationships with their clients.
“To be frank, in the banking community, churches are not sought-after clients,” Johnston says. “If a church has a crisis and can’t pay its mortgage, no bank wants to be caught on camera closing it down and having an elderly widow crying before television cameras.
“With the foundation, we know it can be flexible in helping us get through tough times. You feel like you’re part of a team and they are very much invested in our survival and in our success.”
That flexibility is why the foundation first offered the interest-only option and why it extended the program.
“This may seem like a great benefit, but really, it’s just common sense,” Craske says. “Congregations are hurting, and we’re here to help. As long as the interest payments are made, we’ve fulfilled our obligation. The rest will eventually work itself out when we emerge from all of this.”