St Nicholas Building Project Status and appeal

Saint Nicholas Russian Orthodox Church

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708 South Chestnut, McKinney, Texas

Mailing Address: PO 37, McKinney, TX 75070

Priest Seraphim Holland, 972-529-2754

July 3/16, 2008

Dear brothers and sisters,

Independent Bank in McKinney has finished processing our loan application, and the news is good, but challenging. Simply put, they will give us a loan and we will be able to build our temple, but we have to do a little extra work to make it possible. We will start building as soon as we get the loan, and will be in our new temple before the end of the year. All of the financial details are available for anybody who asks, but the gist is as follows: 1. We had asked for a loan of $150,000. The bank is willing give us a loan of $120,000. We need to make up at least part of this shortfall. We think we can make everything work if we raise $20,000. Our current cash must pay off the land, and pay for all building costs above the loan amount. We are probably about 10,000 short of having enough cash at this moment. We can scrape by with only 10,000 more, but I feel that $20,000 is a reasonable goal (see point #2), if we all work together to reach it.

Therefore, we need more money, in the short term.

  • Do you have any money laid away that you’d planned to give or loan when it was truly needed? Now is the time!
  • Do you know anybody who might be willing to help us out with a gift or a loan towards this amount? Now is the time!
  • Is there a family member or former parishioner with whom you are still in contact, or someone you know who likes our parish? Now is the time to contact them!
View of our new temple and hall, from the North

2. If everybody pays all of their pledges and we see a reasonable amount of growth over the next few years, this is all we need; we will be able to meet our obligations to the bank. I hope this will happen, but things happen in our lives sometimes, and it is possible that all of our pledges will not be paid 100%. If only 90% of pledges are paid, we will absolutely need to raise $20,000 to meet our obligations over the next four years.

This illustrates both the importance of the pledges

and the need to seek additional help wherever we can find it.

3. Our income has increased significantly since the start of 2008, and our projections based on the pledge drive show a further increase. These figures are quite encouraging, and will enable us to meet our financial obligations and complete the building project. Because a lot of this is based on projections rather than on prior year income records, the bank requires guarantors until we can give them an end-of-year report showing that we are meeting our projections. This will mean that we will likely need guarantors only until the end of 2009.

The bank officer explains this requirement as follows:

“Due to the high reliance on projected cash flow, we need to have few guarantors for the loan. A guarantor is not on the actual note and the bank does not report to their credit or send correspondence to them unless there is a situation of default. If this is the case, the bank sends notice that the church is unable to pay and that the guarantors will need to step up and bring the loan/keep the loan current.

“We can have anywhere from 1 to 4 guarantors with financial capacity to support the debt payments. (has accumulated assets, has outside income, etc.)

“Payments monthly after the interest only period will be ~$1,078 and a group of guarantors would need to be comfortable with this number and having a total debt of $120,000 contingent on the church’s well being.
“Being a local bank, we like to have local guarantors as well and would highly prefer members of the church to be considered first. Anyone with a vested interest to make sure the church succeeds is a good candidate.
“The guarantors will be temporary, until the church can show that it can service it’s debt on a historic basis at a rate that is standard in the industry, say: 30% of revenue is used for debt payments. It currently (in 2007) shows that it would use 43% of the church’s revenue for future principal & interest payments.”

Here is what all this “bank speak” boils down to. Since Independent Bank is local, they are willing to work with us. Our income in 2007 was not too good, and their figures are based on that year. They are willing to loan to us, but because our historical income was not as good as it is now, they need “guarantors” to be willing to pay off the loan if we default.

Of course, we have always met ALL our obligations, and with our income rising, and great results in our pledge drive, and prospects for growth in our new area, the future is very bright. We also will actually have LOWER operation costs once we get our new temple built, because it is very energy efficient, and the total mortgage will be LESS than the amount we are paying now for our land and current location.

The bank knows all this, but they have rules they need to follow. Our very conservative forecasts show that they will not require guarantors past 2009. This means that a guarantor will only be obligated until the end of 2009 – about one and a half years. They much prefer local guarantors.

My family believes in this project, and will apply to be a guarantor. Who will join me?

In Christ,

Priest Seraphim.
Rector, St Nicholas Russian Orthodox Church, MCKINNEY, TX

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