This is an excerpt from Dollars and Doctrine provided by author, Rob Kuban. Rob is one of our One Money Design Everyday Money Heroes.
Despite its many stern warnings against borrowing, God’s word never forbids debt as a whole. A believer may stand at this crossroad and wonder what types of borrowing are acceptable or appropriate. The answer to this question is not a simple one.
Overall, the Bible warns Christians to avoid debt not because it is evil, but because of the baggage and bondage it creates in the life of the borrower. Therefore, the ultimate goal is to be completely debt-free. This way a believer is free financially to follow the Lord’s calling without being tied down or entangled in financial obligations. However, in some situations debt can create mutually beneficial situations for the borrower and lender when used sensibly. The best guideline for responsible borrowing has to do with one’s ability to liquidate the debt if necessary. Solomon’s warnings regarding the bondage of debt revolve around the borrower’s inability to pay back what is owed. In a sense, one should never borrow what he cannot “easily” pay back.
More specific and literal guidelines for borrowing can be found in the concluding chapter of this book. For the time being, I will give a few of the leading schools of thought regarding what situations merit an acceptable use of debt. They each have a logical rationale for their beliefs and respectable Christians in their camp.
One common argument defines debt as wise, conservative, or Biblical if the borrower currently holds assets that could be used to pay off the loan in a worse case scenario. For example, let’s say a church borrows money to build a 1 million dollar addition to their building. If their current building and property are paid for and worth more than a million, then they possess the ability to liquidate the debt by selling their building if necessary. A slightly simpler example would be if a business with assets of $150,000 borrows $50,000 to purchase some new computers and networking systems. The Biblical justification for such a belief lies within the borrowers’ ability to cover the debt. This school of thought believes the bondage created by borrowing is negated in a situation were a business or person’s assets are greater than their liabilities.
Overall, this is a reasonable approach to debt, but in some ways this method can be misleading. It often assumes that all things will continue as previously planned: church attendance and contributions will not adjust, sales and revenue will not drop, values of property will not fluctuate, or most importantly, a buyer can be found if something needs to be sold. This method at least accounts for the possibility of liquidating the debt; however, it does tend to create the temptation overestimate values and future projections.
Another group defines debt to be acceptable on items that either appreciate or create income. The most obvious examples of this are a home or profitable business. This school of thought believes that items that appreciate or produce profits can create opportunities to increase a believer’s available assets for the Lord’s kingdom. Debt is used to create wealth that can then be used to fund the work of the Gospel. In addition, these items will almost always be worth more than the amount owed. Therefore, they can be sold to honor the debt if necessary. This carries the same risks as the argument above. This perception of debt is logical but still rests on the future being bright. (This school of thought argues against borrowing to purchase items that depreciate, such as cars or consumer goods, because they do not carry the intrinsic liquidity outlined above.)
Finally, many believers make a distinction between personal and business debt. The scripture does not confirm or reject this division. A Christian should spend considerable amounts of time in prayer before entering into business debt. (Any debt that is personally guaranteed is personal debt.) Already we can see that business debt is by far the most confusing and complicated arena of debt. The water gets murky very quickly when corporations, umbrellas, tax-shields, and third parties enter the equation. I have done my best to address this area of borrowing in the concluding chapter.
After all is said and done, I believe that being debt-free is the wisest possible choice for God’s people. A Christian who studies the scripture earnestly will find more and more reasons to avoid debt altogether. The borrower must ask himself what he is gaining in exchange for such baggage and bondage. More often than not, avoiding debt requires nothing more than patience. “The fruit of the Spirit is…patience.” (Gal. 5:22) I challenge the believer, and especially the church, to consider God’s blessing before heading to the bank. We must deeply reflect over whether or not we are willing to look to the Lord for our financial stability and success rather than a lender. Can He not provide the resources to accomplish His plans? “Is the Lord’s power limited?” (Num. 11:23)
However, since the Bible does not condemn debt, I will offer the following principles to consider before borrowing: All debt should be easily escapable with a long-term goal of being debt-free, the benefits of inviting financial bondage and baggage into your life must be carefully analyzed, and the possibility of God providing the necessary funding should be seriously and prayerfully considered.
|
 |
