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U.S. Church Finance Market
- The annual financing opportunity for the church construction market is currently $28 billion. At its current rate of growth, the market will reach $40 billion by 2010.
- Financing for this market is highly fragmented, despite a growing need for capital — a true “greenfield” opportunity for specialty lenders, with a unique combination of low risk and above-average returns.
- Growth will be driven by an exponential increase in church attendance by nondenominational and evangelical church goers; a trend toward the massive, modern venues commonly referred to as “mega-churches”; and a marked growth in financial contributions specific to the young, upwardly-mobile demographic found in suburban and newly developed communities.
- Nondenominational membership doubled between 1990 and 2001. While attendance at the average American church decreased 12 percent between 2000 and 2005, average church attendance at mega-churches increased 57.3 percent.
- Mega-churches, with an average attendance of more than 2,000, doubled in number to 1,210 between 2000 and 2005. These are commonly multi-use facilities, sometimes incorporating concert venues, conference space, retail, schools and/or athletic facilities.
- In 2005, church attendance hit a seven-year high at 45 percent.
- Annual giving to U.S. Protestant churches in 2005 was an estimated $93 billion.
- Currently, 40 percent of church financing is not provided by commercial banks. Denominational loan funds comprise 25 percent of the marketplace.
- The yield on church bonds is generally 100 to 150 basis points higher than commercial fixed income bonds with a similar profile, with an average default rate of less than 3 percent.
Source: Lambert Edwards Analytics