Our church is looking at lease vs. buy options for a handicap accessible church van configuration that is priced at about $125K from the vendors we have found. They would lease for five years or get a five year loan to purchase.
As usual with dealers, it’s like pulling teeth to get simple data like the money factor and residual value to make a good comparison. They just want to provide money down and monthly payment data.
For the purchase option they are quoting interest rates that make it look like the church is a bad credit risk (they are not). They discount a little off list price, but that’s about it.
It’s been awhile since I’ve been a part of something like this, but typically non-profits do not have good credit ratings or history. Nothing against the mission of the org (or the church), but by definition non-profits do not have large profit streams or a lot of borrowing history. Donations or tithes may not count as sufficient “revenue”, depending on the lender.
Big ticket items like this have usually needed a guarantor or some type of additional collateral. The one situation I assisted with ages ago involved a local parish wanting to start a local transportation service. Getting started was a pain, and it needed the archdiocese to step in and basically guarantee the loan in the event of default.
Same goes with priests… no large income stream, limited borrowing history. It usually needs intervention of some sort to facilitate transactions like these.
For your church, I’d suggest reaching out to the bank where they have their banking accounts and see what they can offer. Or talk to local bank branch managers and they may be more receptive/sympathetic than faceless lenders. Good luck!
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