United Pentecostal Church Development Fund Plans $10M Debt Offering

The organization aims to raise capital through a private securities offering with a minimum investment threshold.

January 27, 2025

Financial Plans and Offering Structure

The United Pentecostal Church Development Fund, Inc. has submitted a filing for a private securities offering, seeking to raise up to $10 million through debt securities. The nonprofit organization, based in Weldon Spring, Missouri, has structured the offering under Rule 506(b) of Regulation D, a commonly used exemption that allows companies to raise capital without registering with the Securities and Exchange Commission (SEC).

The planned offering will have a minimum investment requirement of $250, potentially allowing a broader range of investors to participate. However, as of the filing date, no funds had been raised, and the first sale had yet to take place. The organization anticipates that the offering will extend beyond one year.

Company Background and Leadership

The United Pentecostal Church Development Fund, Inc. operates as a religious nonprofit entity. While not registered as an investment company under the Investment Company Act of 1940, the organization is categorized under the "Other" industry classification in the filing.

Several key individuals are listed in the filing as executive officers and directors overseeing the fund. Among them are Richard Lovall, Lincoln A. Graham Jr., Michael Shelton, David K. Bernard, Roger D. Lewis, and Thomas S. Russell. Some of these individuals serve as both executive officers and directors, indicating an integrated leadership approach in the organization's financial and administrative operations.

Exemption and Regulatory Compliance

The fund is taking advantage of Regulation D exemptions, specifically Rule 506(b), which allows it to offer securities without SEC registration while still maintaining certain disclosure and investor qualification requirements. Unlike Rule 506(c), which permits general solicitation, this exemption restricts public advertising, requiring the fund to rely on pre-existing relationships or accredited investors.

The filing indicates that securities may be sold to both accredited and non-accredited investors. However, no non-accredited investors have participated as of the filing date. This structure may change as the fundraising process advances.

Financial Scope and No Commission-Based Sales

The filing states that the organization has annual revenues ranging between $1 million and $5 million. Despite the size of the offering, no sales commissions or finder’s fees will be paid as part of the fundraising process. This suggests that the organization will handle investor outreach internally or through non-commissioned advisors.

Additionally, the proceeds from the offering will not be used for compensation of the officers, directors, or promoters associated with the filing. This could indicate a focus on reinvesting the capital directly into organizational or mission-related initiatives.

Potential Implications for Investors

Investors considering participation in the offering should note that it is structured as a debt security rather than equity. This means participants would be lending money to the organization rather than receiving ownership shares. The exact terms of the debt, including interest rates, maturity dates, and repayment schedules, were not disclosed in the filing.

The fund’s choice of Rule 506(b) suggests that while there may be some level of investor accreditation requirements, the offering could still be open to a select number of non-accredited investors. Given that the first sale has yet to occur, early investors may have the opportunity to negotiate terms or gain insights into the organization's intended use of capital before making commitments.

Outlook and Next Steps

The success of this fundraising effort will depend on investor confidence in the organization's financial stability and its ability to generate returns on the debt securities offered. As the United Pentecostal Church Development Fund moves forward with its offering, it remains to be seen how quickly it will attract investor commitments and whether it will meet its full $10 million target.