It seems the word got out and eventually some additional churches came to BDM for a loan as well. In a relatively short period of time we had managed to arrange about half a dozen loans to various churches. Even with this very small sample size, we learned there were a few characteristics which were unique to these churches. First of all, and most important to the private party lenders, the majority of the churches who contacted us had equity in their real estate. These churches also had been in existence for 20, 30, 50 years and sometimes much longer. We also learned that most churches had a great deal of difficulty obtaining a loan from institutional lenders, such as banks.
Along with being great to work with, another feature which the private party lenders really appreciated was the simple fact that most churches made their payments on time! This may not seem to be that significant, but these private party lenders had experienced a great deal of slow paying borrowers among the residential loans they had previously funded. So, having the churches pay on time was a very positive experience.
As time went on, we became more educated about churches as we gained more experience working with them to meet their needs. As a result BDM shifted gears completely. We stopped advertising to residential borrowers and instead focused all our efforts on advertising to churches. We haven’t looked back since.
At the beginning it was a challenge to get some of our private party lenders to make the switch as well from lending on residential property to lending on church property. After all, residential property was what they knew best and were most familiar. So, getting these lenders to recognize the advantages of lending to churches took some time and some convincing. Slowly, however, these private party lenders came around.