lending finance for your vision
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Dear friends, Baptist Savings exists to provide finance for churches and Christian charities in New Zealand. Lending is the main way we partner with God’s work in our country. We have over 50 years of experience in lending to churches and charities. We understand Christian organisations and work closely with our borrowers. We have a great lending team, headed up by John Smeaton who has a wealth of experience to offer you.
I hope we can help your vision become a reality. God bless, James Palmer CEO
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J
ohn Smeaton, our Lending
continued even after he changed to
and Finance Manager, was
accounting in 2006 with BDO.
born and raised in New
John joined Baptist Savings in
Plymouth. John spent 28 years
2009 and has built up considerable
working for BNZ, where he advanced
additional expertise since then in
from teller to manage a number of
lending to churches and charities.
BNZ branches. In 1993, he became
John is married to Heather, a music
a dedicated agribusiness manager
teacher and they have six children
for BNZ. His banking career was
and three grandchildren. He currently
based on the excellent relationships
attends Laingholm Baptist Church in
he developed with his clients, which
Auckland. 4
W
e believe in growing God’s kingdom in New Zealand.
The financial capacity Baptist Savings provides is a key part of fulfilling that mission, through partnering with Christian churches and charities all over the country. We understand how churches and charities work because we’ve been financing them successfully for more than 50 years. We are experts in helping churches and charities navigate the complexity of financing successfully, all the way through to repaying the loan.
Who we are Baptist Savings is a registered charity which takes deposits and makes loans. It is an incorporated society, called New Zealand Baptist Savings and Development Society Incorporated. Since the start of 2015, Baptist Savings has been licensed by the Reserve Bank of New Zealand as a non-bank deposit taker—the only remaining charitable or Christian non-bank deposit taker in New Zealand. We are supervised by Covenant Trustee Services Limited (on behalf of the Reserve Bank of New Zealand) in relation to our deposits, and regulated by the Financial Markets Authority. Baptist Savings was formed in 1962, initially to lend only to Baptist causes. In recent years, the rules of the society were amended to include non-Baptist lending. In 2014 Baptist Savings acquired the majority of the Presbyterian Support and Development Society’s loan and deposit books. We now have deposits of approximately $121m, and loans of about $73m.
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Our lending is not simply a transaction, it’s an act of partnership in growing the kingdom of God.
SMALL FRIES CHRISTIAN CHILD CARE CENTRE Auckland 6
What we do As a charity, we do not exist to make a profit. We aim to generate a modest surplus each year, often reinvesting this into the business as capital. This means that when you borrow from us, your loan interest payments are helping to enable us to lend to other churches and charities in turn. You become part of helping one generation after another grow and develop their own missions. We lend to Christian organisations, especially when banks won’t lend or try to charge too much. We understand churches and other Christian organisations in a way that mainstream banks never will. Because of this, we are often willing to lend when a mainstream bank won’t, and can afford to benchmark our lending to mainstream bank residential lending rates (even on commercial property or church premises). Our lending is not simply a transaction, it’s an act of partnership in growing the kingdom of God. So when a borrower is having difficulty meeting their repayment obligations, we make efforts to find a good outcome for the borrower. We take a consultative approach, often involving denominational leadership. In the past we have funded advisers for borrowers in difficulty. Our funds for lending come from a large number of depositors, who often choose to deposit money with us as their own expression of partnership in the kingdom. Our depositors know that their funds are being wisely used to fund churches and charities like yours. 7
Currently, about 60% of our lending is to Baptist and Presbyterian churches, about 20% to other churches, and about 20% to other Christian charities. Some examples of our lending include: BAPTIST CAUSES
Dunedin City Baptist Dunedin City Baptist was housed in school halls and other temporary facilities for many years. After a long search for a suitable site, the church purchased land just below Lookout Point, supported by Baptist Savings. A large multipurpose complex is nearing completion.
Small Fries Christian Childcare Centre When the neighbouring McDonald’s moved out, Windsor Park Baptist Church purchased the site, supported by Baptist Savings. The church built a childcare centre called Small Fries, which is so successful that planning is underway for expansion.
Eastgate Christian Centre Baptist Savings has supported Eastgate Christian Centre’s purchase and redevelopment of several commercial properties adjacent to the church. The church uses the proceeds from its commercial and residential property tenancies to fund church work.
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Freeset Baptist Savings has supported Freeset in the purchase of a new five-storey building near its current premises in a red light district in Kolkata, India. Freeset is a fair trade business offering employment to women trapped in Kolkata’s sex trade. OTHER DENOMINATIONS
Life Church South Auckland
St Columba Presbyterian Church
Baptist Savings recently supported
St Columba is one of the largest
Life Church’s purchase of the Dream
Presbyterian churches in New
Centre site in Manukau. The site
Zealand, and Baptist Savings
will be redeveloped to house a
provides financing which was used
convention centre and the church’s
when the church moved to a new site.
South Auckland campus.
St Margaret’s Anglican Church
Grace Vineyard Church Christchurch
Baptist Savings provides financing
Grace Vineyard Church Christchurch
which has been used for a large
consists of three campuses and has
church property redevelopment
a congregation of more than 2,000.
project.
Following the earthquakes, Baptist
Baptist Savings is involved in
Savings supported the church’s
financing St Columba and St
purchase of a large new building to
Margaret’s as a result of acquiring
house their main worship centre.
the Presbyterian Savings loan book.
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Loans we offer We offer term loans and revolving
mainstream banks tend to apply a
credit facilities which operate in a
higher interest charge for these groups.
similar manner to those offered
We also encourage larger churches
by mainstream banks. While most
and charities to consider financing
churches borrow at our standard
with us. This is partly because our
floating rate, we also offer fixed-rate
specialist expertise is valuable.
loans on request. Repayment can
Alongside that, while we make every
be spread from a short term out to
effort to offer competitive interest
a maximum of 20 years. Our lending
rates to large borrowers, we also
margins are considerably lower than
encourage you to consider the fact
other NZ finance institutions of a
that every loan we make to a large
similar size.
organisation helps make it possible
Our floating rate loans are
for us to offer other loans to a
benchmarked to the residential rates
number of smaller organisations who
of mainstream New Zealand banks.
would otherwise miss out. We share
This is typically a preferential rate for
the load together as equal Christian
smaller churches and charities, as
partners, large or small.
Who can apply for a loan Any Christian church or Christian
Your charity’s rules must allow you
charity can apply for a loan. You
to borrow money and execute a
must be a charity registered with
mortgage over property. Generally,
Charities Services in New Zealand
you will need to have been
(this is the governing body for New
operating for at least three years,
Zealand charities, operated by
as we will require three full years of
the government’s Department of
financial statements as part of the
Internal Affairs).
application process. 10
ST COLUMBA PRESBYTERIAN CHURCH Botany
...every loan we make to a large organisation makes it possible for us to offer loans to smaller organisations who would otherwise miss out. 11 11
What we lend for We offer finance for the purchase
has effectively cost-free finance for
of land, for the purchase and
their church building—and the prospect
development of existing buildings, and
of a long-term income source for
for the construction of new buildings.
church ministry once the building loan
In the past we have funded complex
has been repaid.
projects such as the conversion of
We also finance much smaller
existing church land and buildings
projects, right down to renovations of
into a residential development. The
single rooms in existing buildings such
proceeds were used to buy other land,
as putting in a commercial kitchen or
where the church constructed a large,
an auditorium upgrade.
mixed development of commercial
While we do not offer personal
and church buildings. In this case,
residential loans, we are able to
the commercial buildings provide a
provide finance for your organisation
revenue stream sufficient to service
to buy residential property such as a
the loan repayments on the church
manse.
building, meaning that the church now
CENTRAL BAPTIST CHURCH Palmerston North
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How much you can borrow We will typically lend up to 60% of
over property (generally including land)
the valuation of a church building
to provide the security for the loan. We
or commercial property, and up to
do not require personal guarantees from trustees of the church or charity. As part of deciding how much you can borrow, we will work with you to understand your financial situation and prospects. We
80% of the valuation of a residential
are specialists in understanding giving
property. If a church or charity owns
income, which often forms a significant
other properties, these may be used
part of the finances for a church or
as additional security, giving access
charity.
to higher levels of credit. We are
And as a charity ourselves, we only
often able to lend a higher proportion
want to lend to you if we are confident
of the value of the security than a
you will benefit from the loan, so
bank, again because of our specialist
we will spend time in conversation
expertise in lending to churches.
with you. We are in this to form
The amount we lend will be limited to
partnerships as part of God’s kingdom,
your ability to secure and service the
and that means we will look beyond a
loan. We will require a first mortgage
quick buck too.
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How to apply for a loan Contacting us early in the process is
When it is time to make a formal
often a good idea. With over 50 years
application you will need to supply the
of experience to call on we are able to
following:
guide you with ideas and explain the
• A completed application form (available on our website)
processes. And our Lending Manager, John Smeaton, has considerable
• Three years of financial statements
experience in helping organisations work through the process of preparing
• A budget for the coming year
to borrow money. Sometimes the
• A copy of your rules or trust deed
process of borrowing can take more
• An explanation of your plan to meet the loan repayments
time than expected, and part of the service we offer is assistance in
• Identification of signatories— see our separate Identification
designing your project so that finance is achievable.
Requirements brochure
Please do contact us early in the
• A covering letter giving background information for your
process, even if you are just starting to explore an idea, as we can make
application
suggestions about which ideas are likely to meet our financing conditions.
• Building valuation
Building Valuation – We are happy to use
assessment of the completed value. We
the rateable values that are assigned to
have a panel of valuers we would prefer
all properties in New Zealand. If, however,
you use, where they are locally available.
you are doing a large development
The list is: Colliers International Quotable Value Telfer Young Limited Valgroup
or doing a new build you may need to engage a registered valuer. The valuer will use the plans and make an
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colliers.co.nz qv.co.nz telferyoung.com valgroup.co.nz
In certain circumstances we may require Initial Evaluation Procedure (IEP) or Detailed Engineering Evaluation (DEE) assessments of the seismic performance of buildings to address Earthquake Prone building issues.
Support in saving a deposit As you save up a deposit, we can provide a savings account for you at rates benchmarked to the deposit rates of mainstream banks. By entrusting your money to us, you can help support other churches and charities who borrow from us. We value the trust our depositors have placed in us and their partnership in our work for the kingdom of God, and so we are very careful in the loans we make. A 25% drop in commercial property prices would only put one of our current borrowers into negative equity, and we have only had three occasions in our history where a borrower was unable to meet their obligations. We have consistently made surpluses, even in years where the wider economy has suffered.
What happens next Once we have all the information we need we can generally give indicative approval within two weeks. If we can’t initially approve your loan, we will try to work closely with you to find a way forward. Once your loan application has been approved, a formal letter of offer will be emailed out and once accepted we will instruct your solicitor regarding any new securities. This process can be as short as a week in some instances. Don’t let that delay you in applying, though—the earlier we are involved the more we can help you design your project in conjunction with the finance we can offer.
Contact us today to help make your vision a reality. 15
Level 1, 477 Great South Road Penrose, Auckland 1061 Contact JOHN SMEATON john@baptistsavings.co.nz 021 0272 8090 or Grace Lim grace@baptistsavings.co.nz Some lending decisions involve a wider group, including our CEO and members of the BSDS Board of Directors. 16