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Your Guide to Metal Building Financing
Metal is an excellent building material. It is strong, durable, and resistant. It also comes in large, often prefabricated pieces which are quite simple to build with. For these reasons, it is quite the popular choice to manufacture your new building from metal.
Whether it be a metal garage, a warehouse, an agricultural building, or anything in between, you’d be surprised at the options available to you with metal.
However, as with any construction process, the issue of cost is a big one. How you are going to pay for your new structure is quite often a key issue, and you simply may not have the cash flow available.
This is why many turn to financing. Construction lending is a large part of the industry, and it may be the option you need. But it’s important that you go about it the right way.
Did you know that there are multiple financing options for your metal building?
Or, that by financing your metal building, you can kick your project off sooner than you could have done otherwise?
In this guide, you’ll find out everything you need to know about financing your metal building, including loan options and where to find them. We will also take you through how to estimate cost, the top loan providers to check out, the application process, and how to figure out whether or not a metal building is actually the best option for you.
What is a metal building?
A metal building is a building that either has a frame that is made out of metals such as aluminum and steel or in some cases it might be made entirely out of steel, including the walls and the roof.
Sometimes you can use other materials in conjunction with metals, such as brick, stone and wood.
This means that you can completely customize your steel building, which could include having a metal building which has the appearance of wood but at a fraction of the cost.
These metal buildings are cost-effective, and they are often used for things like student accommodation, classrooms or temporary homes for disaster relief because they can be quickly constructed and replicated.
Plus, you can benefit from being able to expand your building relatively quickly, or change the interior floor plan.
What can I use a metal building for?
Metal buildings traditionally have a wide range of uses, here are a few that you might want to consider:
- Vehicle storage
- Residential homes
- Agricultural storage
- Self-storage units
- Student accommodation
- Retail outlets
- Pop up shops
- Pop up cafes
- Cafes and restaurants
- Shopping malls
As you can see, metal buildings can be suitable for many different industries, especially considering that with customization, your steel building could look unique to your brand, using paints and other materials such as cladding.
You can also customize things such as how many doors you want, the size of the openings, the shape of your roof and interior finishes.
Or, you could choose to have metal buildings that can be easily duplicated to a uniform style and materials.
There are many options out there, and it really depends on what you are looking for. This takes us to our next topic:
Before You Start Your Project: Evaluate and Plan
In consideration of all the above uses we outlined directly above, you might be a bit overwhelmed at all the options available to you. For this reason, before you start a building a metal structure, it is important to identify what you will actually be using your metal building for.
This way, you can form an accurate plan which takes into account the materials, labour, and other considerations which will account for your overall cost. The more accurate your plan, the more accurate your cost estimates will be, which will determine your overall financial situation and your individual financing considerations. Once you have this accurate picture of your project, you can evaluate the financing options we will survey below.
Not only will this help to ensure that you build a proper metal structure for your needs, it will also ensure that it is affordable and within your realistic range of financing options.
How can I finance my metal building?
Financing options can seem difficult and confusing at first. In a way, they are actually meant to be confusing, so that you have difficulty in evaluating the fairness of the offer you are receiving. In this article, we aim to help you understand the different options available, so that you can pick the best option for your needs.
There are several ways to help finance your metal building, and choosing the best one for you can make a significant impact on how quickly you can start construction.
As well as what you will need before you begin.
Funding Option: Personal funds
Did you know that some metal buildings will only cost you a couple of thousand dollars?
Because they are made to be an affordable alternative to using other materials, sometimes it’s reasonable to be able to save up your funds to pay for your building outright.
The benefits to this are that you can start designing and constructing your building right away, as soon as you establish with your provider what you need your structure for.
Sometimes, you might be able to purchase a prefabricated building, which can make construction time a lot quicker.
Prefabricated buildings mean that the parts of the building are made elsewhere, then they are brought to your location and assembled.
This can either be done by yourself, or with a team of professional builders.
For small buildings like garages you might be able to do everything yourself, but for larger structures such as barns or homes, you will likely need to pay extra for your structure to be built.
Either way, it tends to be quite a bit cheaper in the long run, because you significantly save time and money on construction and assembly costs. So while it may cost a bit more up-front for materials, you tend to save money over the course of the whole process.
As you are paying for all of this yourself, you can either choose to pay for everything outright, or you could pay as you go which means paying for things as and when you can afford it.
Top 5 Direct Steel Companies
1. Metal Building Outlet
Type: Metal building supplier
Metal Building Outlet is a Colorado-based company that provides its customers with prefabricated steel buildings which you can buy directly.
They can offer you structures for both residential, commercial and industrial purposes, as well as accessories and parts such as doors, windows and insulation.
Although they don’t offer clear pricing information for their buildings, you can get a quote from their website based on your needs.
2. SteelMaster Buildings
Type: Steel building supplier
SteelMaster Buildings are a supplier of both steel buildings and prefabricated kits, which can be used for many uses such as a garage, carport, a house, a metal barn, for government use, as airport hangars, and as mining structures.
Their steel buildings can come in many different styles and shapes including Quonset Huts, A-frame buildings and X-models, to name a few.
Type: DIY steel building kit supplier
Versatube is an excellent choice for many customers because they offer do-it-yourself kits which can be easily constructed without the need for professional builders or expensive equipment.
Not only can you purchase your Versatube kit directly, but you can also view a clear pricing structure on their website.
Versatube offers a low-cost solution, quick construction times and premium American steel as their primary material.
4. Worldwide Steel Buildings
Type: Steel building supplier
Worldwide Steel Buildings are a Missouri-based company which can provide many kinds of steel buildings such as agricultural structures, recreational structures, or residential and commercial buildings.
Their prefabricated steel kits are American-made, have a high quality, and they are long-lasting too, with minimum maintenance required.
5. Absolute Steel & Storage
Type: Steel building supplier
Absolute Steel & Storage is an Arizona-based company who specializes in creating metal building kits for their customers for commercial, residential and government use.
Their steel building kits are created to be easy to construct, only require a few necessary tools to build your structure, and require little upkeep.
This can have you save significantly on funds, while not sacrificing on quality, as their steel is made with parts manufactured in America.
Financing land and construction
Traditionally, if you needed to acquire funds for both development and the property you need to build on, lenders might offer you a loan which might be divided into two phases.
One for the purchase of the land, and another phase which would be for the cost of construction.
Sometimes these loans have left people with higher interest rates and costs, which is why now they will usually only offer construction or permanent loans.
Your bank will likely give you cheques as required, and when different stages of the construction are completed, so they will check in and see how everything is going.
Of course, with this type of financing, you will require a large loan typically. You might have to put up more collateral, and deal with more stipulations. After all, the bank is taking more risk on your project.
Financing construction only
Construction-only loans, on the other hand, are most effective if you already have the land that you intend to build on.
These loans are often quite straightforward, so you pay back the money you borrow with a percentage of interest on top; however, you will need much more documentation.
In general, this will mean things such as floor plans, whether you are sticking to regulations and ordinances as well as financial records and credit scores. Basically, the bank needs to know that you have a plan for construction, and an ability to pay back the loan. They want to ensure that you are actually going to put the money to its intended use.
You can find out more about how to apply for a loan below.
Types of loans
As with anything in financing, there are a variety of terms and options when it comes to securing a loan. It is very important that you evaluate the terms extremely carefully. You need to be sure that the terms are favorable, and it will be something that you can realistically repay. Here are some common examples of construction loans:
- One-time construction: A one-time construction loan will usually mean that you have one signing, and after around 12 months it will convert into a permanent loan.
- Note modification construction: A note modification construction loan traditionally gives you two different interest rates, one for your development and another for your permanent loan.
- Two-time close construction: Two-time close construction loans mean that you close two times; once for your construction loan, and another time for your mortgage. It is essentially like financing two separate loans.
Top 5 Steel Building Loan Providers
1. New Century Bank
New Century Bank is a Kansas-based lender who specializes in providing mortgages to their customers, for both traditional homes as well as steel or modular buildings as well.
They have a team of uniquely qualified individuals who have specialist experience in different areas such as metal sheds or barns.
This helps them to stand out when it comes to acquiring a steel building loan for your structure.
2. United States Department of Agriculture
Type: a Government department
Location: Washington D.C
The United States Department of Agriculture can offer farmers and ranchers a wide range of different loan types which include the following:
- Direct operating loans, micro-loans, direct farm ownership loans, and guaranteed loans, which are based on the fact that you run a family-sized business and can afford the interest rates and repayments on offer.
These interest rates range from 1.500% and 4.00%, and your loan could be used for anything from purchasing livestock to building improvements and steel building construction.
3. Viking Steel Structures
Type: Steel building supplier
Location: North Carolina
Viking Steel Structures are a company which is based in North Carolina and provides their customers not only with steel buildings but also financing.
According to their website, you will be able to find out if you’re eligible for a loan within 48 hours, so it isn’t a time-consuming process or a long wait to find out all you need to know.
The requirements for acquiring finance through Viking Steel Structures are that you are a homeowner, your finance application will be through the same name as your own, and providing two years of residency and employment information.
4. Admirals Bank
Location: Boston, Rhode Island
Through their partnership with Morton Buildings, customers can benefit from the expertise of Morton Buildings’ 100 years of experience, and the financial stability of Admirals Bank.
You can utilize these finance options for a garage, a horse barn, a workshop, or any other buildings that you can use for your hobbies.
According to Morton Buildings, the process is fast, and you can find out if your loan is approved quickly.
5. Home Improvement Loan Pros
Type: Loan provider
Location: South Carolina
Home Improvement Loan Pros have been around since 2004, and have provided over 100,000 customers with assistance and loans for their homes and home improvements.
Their loans can be used for multiple purposes such as steel homes, artificial turf, kitchens, driveways, horse barns or pools to name a few.
You can borrow up to $100,000, and you can check your credit scores before you start.
How do I apply for a loan?
Depending on your lender, and the type of loan that you choose, you might need to provide some different documentation or more detailed information. However, this is generally what you will need.
All of these things might not necessarily be required, but they could help your application. Either way, it definitely doesn’t help to have knowledge of all these areas. Good planning can’t hurt.
- Have an account with the lender
- Look at your lender’s portfolio to see if your business fits
- Be prepared to borrow a short-term loan
- Have a pack prepared which includes blueprints, floorplans, financial information, your location and things like what your building will be used for
- Make sure that your structure fits in with others that surround it
- Have an excellent credit score, as lenders often use this to make sure that you will pay back the money you have borrowed
Where can I typically find a construction loan?
Typically, this is where you can construction loans:
- Credit unions
- Mortgage banks
- Online lenders
- Private lenders
- Independent financiers
The best match for you might depend on different factors which might include things such as your credit history, what interest rate you can find as well as which lender has the traits you prefer.
This could be things like their online customer rating, having 24/7 support or if they can help you apply for your loan too.
How much do construction loans cost?
Although your construction loan will have a specific cost depending on your particular scenario, here is a general guide you can use to see what your loan might cost.
Let’s take a look.
|$15,000||5 YRS||$332.85 per month|
|$25,000||5 YRS||$562.25 per month|
|$35,000||5 YRS||$773.15 per month|
|$50,000||5 YRS||$1,085.50 per month|
|$75,000||5 YRS||$1,628.25 per month|
|$100,000||7 YRS||$1,649.44 per month|
|$150,000||7 YRS||$2,473.50 per month|
|$200,000||7 YRS||$3,298.00 per month|
|$300,000||7 YRS||$4,908.00 per month|
Thanks very much for reading our guide to metal building financing. As you can see, as with any area of financing, it can be quite confusing at first. Your best bet is to have an accurate understanding of your own financial requirements and financing needs. This way, you can match your individual circumstances to the best option available above.
In conclusion, there are many different options when it comes to financing your metal building, such as getting a loan or funding the project yourself. Choosing between these options requires careful analysis of your own situation.
Have you learnt everything that you need to know about financing your metal building?
Do you want to learn more about building with steel?
Take a look at the Green Building Elements guides here, to find out more.