Revolving fund fills ministry needs across the Lake Union

Jon Corder December 2, 2019

Revolving fund fills ministry needs across the Lake Union

During the course of one’s career, there are usually highlights that stand out in your mind where you feel that what you did, or were a part of, really made a difference. Such were the thoughts of a retired Union treasurer when he reminisced about the part he had in establishing the revolving fund in his territory in the mid-1970s. “Of all that I accomplished, that is what I am most proud of! What a blessing the revolving fund has been for our organizations over the years!”

The Lake Union Conference Revolving Fund was established in 1976 to assist Seventh-day Adventist organizations, located in Lake Union territory, with loan funds for building purchases, building construction and improvement, and emergency projects. Funding came from church members and organizations that shared the vision to have attractive and user-friendly facilities for our churches and schools. The revolving fund had a name change in 1993 to the Lake Union Conference Revolving Fund Trust. This was done to better protect the assets of the fund. This year marks its 43rd birthday!

When a church or school has a project that requires funding, a loan may be obtained from the revolving fund. The organization completes a loan application provided by their local conference and then submits it for conference and union approval.

The terms for loans range from two to ten years, depending on the amount borrowed. Loans above $25,000 may be spread over 30 years, however, the loan must be renegotiated every 10 years. The good news is there are no loan initiation fees, prepayment penalties, late payment fees, or refinance charges.

Because the revolving fund is not FDIC insured, safety nets have been established to protect the interests of those who have deposited funds in the revolving fund.

Organizations are unable to borrow 100 percent of their project. They must have at least 50 percent of the cost in hand for new projects and 30 percent for remodels, equipment, and emergencies.
The local conference cosigns on all loans given to organizations within their jurisdictions.
Whenever loans are past due more than 60 days, payments are automatically deducted from monthly appropriations sent to the conferences.
All loans over $10,000 have liens or mortgage deeds recorded on the property.
The revolving fund maintains healthy reserves (currently 63 percent of funds loaned) and invests these funds conservatively.

A question that is asked occasionally is, “Why does the revolving fund charge interest on loan funds?”

The funds that are loaned to organizations belong to depositors — not to the revolving fund. The revolving fund merely provides a service that matches depositor funds with Lake Union organizations needing projects funded. Rightfully, depositors are paid a modest interest rate on money they deposit in the revolving fund and that expense is passed on to the borrowers. Otherwise, we would not be able to operate the revolving fund. Our goal is to cover the costs of running the revolving fund and have reasonable reserves.

We can be thankful that many of our Lake Union members believe in the mission of the revolving fund — some have for years! They have made a tremendous difference by sharing the resources with which God has blessed them. Now and then they say something like, “We feel good about having our money in the revolving fund. We like having it used to build and remodel churches and schools.”

The establishment of the revolving fund has been instrumental in creating a win-win situation. It has provided funding for projects at a reasonable interest rate while compensating church members and organizations who have provided those resources. It truly has been, and continues to be, a blessing as it fills a mission and ministry need within the Lake Union!

“This is not an offer to sell our securities to you and we are not soliciting you to buy our securities. We offer and sell our securities only in States where authorized, and solely in accordance with the terms of our offering circular.”

Jon Corder, associate treasurer and Stewardship director of the Lake Union Conference.