Part 3: Finance1

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Sources of Capital

a. Equity Starting the business Growing the business

b. Profit Serving needs of others Offering product a fair price Producing quality product and quality service

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Sources of Capital

c. Debt Scriptural Perspective:

• Financial and Spiritual lives are linked• Borrowing is not prohibited, but is discouraged• God wants you to avoid “financial bondage”

“The rich rules over the poor, and the borrowerbecomes the lender’s slave”

(Proverbs 22:7)

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Sources of Capital

c. Debt1) How should we borrow?• Avoid surety

“A man lacking in sense pledges and becomes guarantor in the presence of his neighbor.” (Proverbs 17:18)

• Avoid long term debt“At the end of every seven years you shall grant a remission of debts.” (Deuteronomy 15:1)

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Sources of Capital

c. Debt2) How should we repay?• Promptly and in full

“Do not withhold good from those to whom it is due, when it is in your power to do it. Do not say to your neighbor, ‘Go, and come back, and tomorrow I will give it,’ when you have it with you.” (Proverbs 3:27-28)

• Is bankruptcy an option?

“The wicked borrows and does not pay back, but the righteous is gracious and gives.” (Psalm 37:31)

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Sources of Capital

c. Debt3) How to become debt free:• Make a commitment• Start where you are• Develop a debt repayment plan

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Lending

a. Should we extend credit?“At the end of every seven years you shall grant a remission of debts. This is the manner of remission: every creditor shall release what he has loaned to his neighbor; he shall not exact

it of his neighbor and his brother, because the Lord’s remission has been proclaimed” (Deuteronomy 15:1-2)

According to these verses, it seems evident that lending, even to brothers, is scripturally acceptable.

T or F

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Lending

a. Should we extend credit?Determine Need:

• Is loan necessary or a symptom of a bigger problem?

• Good repayment history?• Are you willing to lose the money you lend?• Will a loan change your relationship?

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Lending

b. Should we charge interest? • “You shall not charge interest to your

countrymen: interest on money, food, or anything that may be loaned at interest. You may charge interest to a foreigner, but to your countryman you shall not charge interest, so that the Lord your God may bless you in all that you undertake in the land

which you are about to enter to possess.”

(Deuteronomy 23:19-20)

Lending

Interest is acceptable under certain conditions.

T or F

What are those conditions?

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Collections

a. What should our attitude be about collections?

• “A good name is to be more desired than great wealth, favor is better than silver and gold”

(Proverbs 22:1)

According to this verse we should never

suffer a loss if there are legal means of collecting

T or F

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Collections

b. Stewardship of God’s possessions•

“Bless those who curse you, pray for those who mistreat you. Whoever hits you on the cheek, offer him the other also; and

whoever takes away your coat, do not withhold your shirt from him either. Give to everyone who asks of you, and

whoever takes away what is yours; do not demand it back.” (Luke 6:28-30)

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Collections

b. Stewardship of God’s possessions

In these verses, we are given a principle of collection. It implies that God will be upset if we

lose money that He has entrusted to us.

T or F

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Collections

c. Remedies Lawsuits• Individuals vs. entities• Principle of losses

Collections

“Actually, then, it is already a defeat for you, that you have lawsuits with one another. Why not

rather be wronged? Why not rather be defrauded?”

(1 Corinthians 6:7)

In this verse, we are told to be

______________ and ______________

rather than to sue.

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wronged defrauded

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Collections

c. Remedies Conflict resolution

"If your brother sins, go and show him his fault in private; if he listens to you, you have won your brother. But if he does

not listen to you, take one or two more with you, so that by the mouth of two or three witnesses every fact may be confirmed. If he refuses to listen to them, tell it to the church; and if he refuses to listen even to the church, let him

be to you as a Gentile and a tax collector."

(Matthew 18:15-17)

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Finances

Principle

Avoid financial bondage for

yourself and others.

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Finances

Case Study

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