Benefiting broker/dealers and the issuing church.
For years, church bonds have been a valuable source of long-term capital for churches. Financing a church project with a bond issue can have huge advantages over conventional bank loans.
Bonds offer a fixed, competitive interest rate and fixed amortization payment schedule which provide a long-term solution that church leaders can plan and budget around. Bond terms can range from one to 30 years.
With bonds, there are no rate changes, pre-payment penalties or balloon payments typically associated with bank loans. Bank loans often renew every 3-5 years and can require expensive appraisals and audits. Additional financing can be obtained without the requirement of refinancing the original bond issue.
Bonds give the congregation and other investors the opportunity to earn an attractive rate of return while contributing to the growth and vision of the church body.
How a bond finance program works
GoldStar works with a number of Broker-Dealers on bond issues throughout the country. At GoldStar, we serve as trustee, registrar, and paying agent on the bond issues. The funds invested by the bondholders will be deposited into a Bond Proceeds escrow account where our legal compliance department can monitor the funds and disburse them in accordance with the purpose of the bond offering.
A second bank account, called a sinking fund, will receive the monies paid by the church to return principal plus interest to the bondholders. (This account is called a sinking fund because the account is used to pay bondholders and will “sink” in value until the account is empty at the end of the bond program.) GoldStar Trust Company closely monitors and audits the movement of all monies placed into these accounts through the life of the bond issue.
In addition to overseeing the transfer of funds between church and bondholder, GoldStar will make sure all corporate documents, title insurance and other pertinent documentation is gathered before the bond program officially begins and maintained until the day it closes.
We’re here to serve you
Our goal is for the church to succeed and for all members, bondholders, and investors to succeed with it.
Contact us today if you are considering a church bond program as an alternative to conventional financing, or if you are interested in including church bonds for your clients