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 [email protected] 021 0272 8090 or Grace Lim [email protected] Some lending decisions involve a wider group, including our CEO and members of the BSDS Board of Directors. 16