Objective Truth About Borrowing and Lending
By Michael Eastham, CPA

As Christians, it is very easy for us to allow a surface level reading of scripture to put us in a place of legalism, distracting us from the true theme or deeper meaning of the text. Several topics in our culture are responded to in just this way. One of those topics is debt. There are many Christians who believe that the Bible says “do not be in debt”. The Bible does address borrowing and lending in many places, in both the Old and New Testaments. However, as you will discover, the acts of borrowing and lending are created by God and as a result, are fundamentally good. It is how we apply the opportunities to borrow or lend in our lives that determine whether we glorify or dishonor God.

To clarify this point, consider the way we treat our bodies when we eat. God created food for us to nourish and strengthen our bodies. If we exercise self-control over the types and quantities of food and drink that we put into our bodies, we will glorify God as good stewards of the temple that He has given us. However, if we overindulge, we will become obese, unhealthy and poor stewards of our bodies and thus we will have used that which God created for good in a sinful way.

Although there are many scriptures that address borrowing and lending, there are none that prohibit debt. In fact, several scriptures, both Old and New Testaments assume that people will borrow (Exodus 22:14, 2 Kings 4:3), some that even encourage and commend those who lend (Psalm 37:26; Psalm 112:5-6). In fact, Jesus seems to approve of lending money and charging interest to earn a return on investment, when he describes stewardship principles in the parable of the Talents (Matthew 25:14-30) and in the parable of the Ten Minas (Luke 19:11-27). In both of these parables, there is also the assumption of taking calculated risk with the resources over which you have been given stewardship responsibility, for the purpose of creating a rate of return on those resources.

John Piper addresses Jesus’ comments in these parables by commenting that, “We realize that Jesus is not focusing his teaching here on the legitimacy of banking. Nevertheless we assume he did not illustrate his point with an unlawful suggestion—namely, investing money with banks that pay interest, and presumably make loans to earn the money to pay interest”. He goes on to say, “…Matthew 25:27 seems to say that Jesus did not oppose banking that charged interest. This is probably because he saw a difference between the lending among brothers in need (as in Exodus 22:25 and Deuteronomy 23:19) and the strategic borrowing and lending as part of an economy that sometimes needs large capital outlays for construction and purchasing” .

One of the most often quoted verses in Scripture is Romans 13:8, which says, “Owe no one anything”. The problem here is that it is often quoted out of its true context. This part of verse 8 does not appear to discourage or prohibit borrowing at all. In fact, when we evaluate it in its proper context, it says that we should pay what we owe when it is due.

In his book, Business For the Glory of God, Wayne Grudem says, “If we look at the statement in its proper context, translated to show the connection between verse 7 and verse 8, it reads as follows:

For the same reason you also pay taxes, for the authorities are ministers of God, attending to this very thing. Pay to all what is owed to them; taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. Owe no one anything, except to love each other, for the one who loves another has fulfilled the law (Romans 13:6-8).

As is evident in this translation, the command, “owe no one anything,” is simply a summary of the obligations to pay what we owe as specified in the previous verses, whether taxes or respect or honor or so forth. Therefore, if I have a mortgage on my house, I should make the mortgage payments when they are owed; that is, I should make payments on time as I have agreed to do. I do not owe the entire balance of the mortgage to the lender until the date specified .”

Further, in a position paper evaluating the consideration to use debt for the purchase of the North Campus of Bethlehem Baptist Church in Minneapolis, MN, John Piper also discusses this same scripture and states that the apparent prohibitions of debt are not absolute prohibitions. He goes on to say, “If we take [the text] absolutely, it not only rules out borrowing a rake from your neighbor, but also contradicts texts in the Bible that give instruction for how to lend…”

As you examine the characteristics and process of borrowing and lending, you will see that it is an extraordinary gift that God has given to us to use for His glory. One of the most significant benefits of this process is the fact that it exponentially increases the value and usefulness of goods and services in our society. In other words, I do not have to own a specific piece of equipment, car, money, etc in order to benefit from its usefulness. For example, I may only need a specific piece of equipment on a periodic basis, or for a project, and as such, it would not make economic sense for me to purchase it. If I have the ability to rent (borrow) from the equipment rental company (lender) who owns it, I (and thousands of others) can still benefit from its usefulness. The same is true of money. If I have an opportunity to purchase a home, start a business, or take advantage of an investment opportunity, but I do not have the finances to invest on my own, I can go to the bank (lender) and rent (borrow) the money. In either case there is a fee that I will need to pay for this convenience. In the case of a product, it is built into the periodic rental fee; in the case of money, it is called interest. Is there risk in any of these transactions? Yes, there is. However, as a part of everything we do in life, it is always a wise practice to evaluate the risks and rewards before deciding to move ahead in any endeavor; whether we are considering renting a car, buying a house or starting a business.

Although there are virtually an unlimited number of items that can be borrowed and loaned (and these truths apply to all of them), it seems that the majority of the controversy surrounds the use of money. One of the most interesting characteristics about the borrowing and loaning of money is the fact that it can be utilized multiple times through the recirculation process, at virtually the same time. For example, suppose I am a banker and I have $500,000 to lend. In order for that money to generate a profit for me, I must put it to use. Now, if I loan it to a person who wishes to buy a $600,000 building, but only has $100,000 himself, it begins to earn me interest every month. If he had to pay cash for that building, he may never be able to take advantage of the opportunity because it would take far too long for him to accumulate the amount of the purchase price. Now let’s suppose the seller takes $500,000 of the $600,000 sales price and puts it back into my bank. Once again, I have the ability to take that same $500,000 and circulate it back into the economy again in another transaction. This is what I call the “velocity of money” principle; keeping money in motion. The value of that original $500,000 has just doubled to $1,000,000. There is no limit to the number of times this can happen! This is an amazing truth, but one that is unique to the characteristics of money. You cannot accomplish this phenomenon with other physical assets such as a machine or a vehicle. It is impossible for the same machine to be rented by two different people at different locations, for different purposes, all at the same time.

When it comes to personal fiscal literacy, unfortunately, the consumer mindset of most Americans does not treat money as a tool, but rather as a conduit for pleasure. Further, when Americans consider financial planning, most people tend to either, ignore it and hope for the best or put their faith in a company pension plan, retirement plan or in the government. However, God has given us tools, resources and the ability and mandate to be productive (see Genesis 1:28) and to operate in our faith in Him. It is our responsibility as stewards of all that He has provided, to evaluate, consider and optimize all of our resources and put them to use in a way that brings Him glory and honor, in the context of our individual calling. When we consider this truth, it opens up a world of opportunity to us that we may never have considered. For example, the possibility of using a mortgage as a tool to manage the equity in your home may be a productive way to create a significant amount of additional assets for your own retirement. It does not, however, mean that our endeavors are without risk. When a farmer sows his seed, he is not guaranteed that he will reap a harvest. This risk does not keep him from investing time, energy and money into the cultivation of his investment. Whenever we invest, we take some level of risk. As mentioned previously, our responsibility as good stewards of our God-given resources is to count the costs, to the best of our ability, and to step out in faith by taking action. I warn you not to be surprised, when you do take action, because your actions may be contrary to everything that you have been taught up to this point. Another consideration, however, comes from Proverbs 22:7, where it states in part that “the borrower is the slave of the lender”. To the degree that borrowing is relied upon unwisely, that part of our finances are taken out of the Lordship of Christ and subjected to the lordship of man.

We need only to consider what our economy would look like if we had to live on a cash basis and did not have the ability to borrow and lend, to realize that this process is an amazing gift from God, designed to bring Him glory. It is yet another of the wonderful elements of His creation that we can use either to show that we are good stewards and thus glorify Him, or to abuse and show that we are poor stewards, thus dishonoring Him. Which will it be for you?

¹ John Piper, How the Elders of Bethlehem Baptist Church Decided That it was Biblical and Wise to Borrow Money to Purchase the North Campus.
² Wayne Grudem, Business for the Glory of God:  The Bible’s Teaching on the Moral Goodness of Business (Crossway Books 2003)
³ John Piper, How the Elders of Bethlehem Baptist Church Decided That it was Biblical and Wise to Borrow Money to Purchase the North Campus.

Michael Eastham is a CPA, CRMS and is the host of the radio show “Your Home, Your Money,” which airs Saturdays at 12:00 p.m. , Saturdays at 1:00 p.m. and Mondays at 4:00 p.m. on The Clear Channel and Salem Radio Networks.