How Long Can You Finance a Metal Building? A Comprehensive Guide

Securing financing is often a crucial step for businesses, farmers, or homeowners looking to invest in a high-quality, durable metal building. 

However, understanding the typical financing terms and qualifying for the most favorable loan duration can be confusing. In this comprehensive guide, we’ll explore every aspect of how long you can finance a metal building based on your unique situation.

What is the Average Financing Term for Metal Buildings?

While there’s no one-size-fits-all answer, most lenders offer financing terms ranging from 10 to 30 years for metal building loans. The most common terms tend to fall within the 10-20 year range, with some specialized programs extending up to 25 or 30 years in certain qualified cases.

However, the financing duration you can secure depends on a variety of factors related to the loan program itself, your financial profile as a borrower, and the specifics of the metal building project. We’ll dive deeper into those influencing factors shortly.

The key takeaway is that while double-digit year terms are widely available, working with an experienced lender is essential to structuring the ideal financing package with affordable monthly payments and a reasonable loan term fitted to your needs.

Factors that Influence Metal Building Financing Length

No two borrowers are alike, and lenders evaluate a range of variables to determine the qualified financing term for a metal building loan. Here are some of the core factors that can increase or decrease the possible duration:

• Loan Program: Different loan products like home equity loans, construction loans, commercial loans, USDA loans, etc. come with varied maximum term lengths out of the box.
• Down Payment Amount: Making a larger upfront down payment can qualify you for a longer possible term since you’re putting more equity into the project upfront.
• Income and Revenues: Demonstrating higher, more stable income flows as a business owner or individual can increase the allowed financing duration.
• Credit Score: Just like with a mortgage, an excellent credit score opens more possibilities for longer terms from lenders. Lower scores lead to shorter terms.
• Building Cost and Loan Amount: More affordable buildings may qualify for slightly longer terms. Very large, expensive projects often have shorter maximums.
• Purpose and Location: Agricultural/rural loans may have longer terms than commercial/industrial building loans. Properties in certain areas get different treatments.

The optimal financing term accounts for your unique financial profile weighed against the lender’s risk parameters for a given loan program and project scope. Let’s look at some examples of how these factors interplay:

Example 1: A business owner with excellent credit (750+ score) and 35% down payment for a $350,000 commercial metal building could likely secure a 20-25 year loan.

Example 2: A farmer with good credit (680) and 20% down on a $85,000 agricultural metal building may get approved for a 15-20 year term via a USDA Rural Development loan.

Example 3: A homeowner with fair credit (640) seeking a smaller $50,000 loan might max out at a 10-year term unless they can make a larger 30%+ down payment.

As you can see, there’s a wide variation in possible financing durations based on the specifics of each borrower and project. The most creditworthy borrowers putting more money down on smaller projects in qualifying areas tend to access the longest terms.

Pros and Cons of Longer vs. Shorter Financing Terms

On the surface, it may seem obvious that qualifying for the longest possible term would be ideal to minimize monthly metal building loan payments. However, there are pros and cons to weigh for both shorter and longer financing durations:

Shorter Terms (e.g. 10 years):

• Pros: You pay the loan off much faster with a shorter term. You pay significantly less total interest over the life of the loan compared to longer terms.
• Cons: Higher monthly payments can strain cash flows for the duration. May be difficult to qualify for a shorter term if cash flows are tight.

Longer Terms (e.g. 20-30 years):

• Pros: The longest terms have the lowest possible monthly payments, preserving more short-term cash flow if needed.
• Cons: You remain in debt much longer. Total interest paid over 20-30 years can double or triple the original loan amount in some cases.

To illustrate with a real example, consider a $200,000 loan amount:

Term Length	Interest Rate	Monthly Payment	Total Interest Paid
10 years	5.5%	$2,028	$43,360
20 years	6.5%	$1,389	$133,380
30 years	7%	$1,213	$236,680

There’s no universally correct answer for the “best” loan duration. It depends on balancing your near-term cash flow needs against long-term costs and your level of comfort carrying the debt over extended periods. If you can afford the higher monthly payments in exchange for massive interest savings, shorter terms make sense. If not, longer terms become very appealing even with the steeper total costs.

How to Qualify for the Longest Possible Financing Term

Based on the factors discussed earlier, there are several potential ways to position yourself for the longest affordable metal building financing duration:

1) Improve Your Credit Score

Since credit score is a huge determiner, spend time paying down balances, resolving any delinquencies, and implementing other credit improvement strategies to push your scores into the highest “excellent” ranges if possible. Scores above 760-780 will maximize your options.

2) Make a Larger Down Payment

The more you can put down upfront, the lower the loan amount and total risk to the lender. This gives you major leverage to request longer terms. Aim for 20% down minimum, but 30-40%+ down payments are ideal.

3) Demonstrate Strong, Consistent Income Flows

Lenders want confidence you can sustain the monthly payments over a longer duration. Having reliable incomes, long employment histories, and making larger down payments helps prove this.

4) Explore Specialty Loan Programs

Some loan products like USDA Rural Development loans or SBA loans geared towards agricultural, rural, or small business borrowers may offer extended terms as an incentive.

5) Sacrifice Loan Amount for Term Length

If maximizing the duration is paramount, downsizing the total project/loan amount and making a larger down payment could enable you to secure a longer term you couldn’t otherwise qualify for.

The higher your overall creditworthiness as a borrower and down payment level, the more flexibility you’ll have in negotiating for an extended loan term – even up to the 25-30 year maximum ranges in some cases if you check all the boxes.

Read This: Your Complete Guide To Dental Veneers Cost

Typical Metal Building Financing Options

There is no single “metal building loan” from conventional lenders. Instead, borrowers leverage products like home equity loans, construction loans, commercial real estate loans, and other financing vehicles to fund their metal building project.

Here’s a quick overview of some of the most common loan types used:

Home Equity Loans or HELOCs

• Allowing you to borrow against your existing home equity
• Rates around 3-5% for stellar credit
• Capped at 80-90% of maximum available equity
• Repayment terms like mortgages – up to 30 years

Construction Loans

• Short-term lending during the building phase
• Higher interest rates like 8-12%
• Typically maxes out at 12-24 month terms
• Must refinance to longer-term permanent loan after

Commercial Real Estate Loans

• For purchasing or constructing commercial property
• Rates around 5-7% with good credit
• Available up to 25-30 year repayment schedules
• May require 20-30%+ down payments

Personal Loans/Lines of Credit

• Unsecured lending using only your credit profile
• Higher interest rates around 10%+ for average credit
• Repayment terms around 5-7 years typically
• Lower loan amount caps around $50,000-$100,000

The optimal financing path depends on the metal building’s intended purpose (residential, agricultural, commercial, etc.), your creditworthiness, available down payment funds, and the total project cost involved.

Many borrowers leverage a combined approach – using a construction loan for the initial build, then refinancing into a lower-rate, longer-term commercial real estate or home equity loan once the metal building is complete.

Specialty Financing Programs for Metal Buildings

In addition to conventional loan products, there are a few specialized financing programs tailored specifically for purchasing and constructing metal buildings in certain qualifying scenarios:

USDA Rural Development Loans

• Offered through the U.S. Department of Agriculture
• Intended for agricultural/rural properties and businesses
• Can provide up to 30-year fixed-rate financing terms
• Low rates around 3-4% for qualified borrowers
• Loan amounts up to $600,000+
• Eligibility based on rural location, farm/agriculture use, income limits

The USDA Rural Development loan program represents an outstanding opportunity for farmers, ranchers, and certain rural small businesses to secure very affordable, long-term financing for agricultural steel buildings like barns, machine sheds, farm shops, etc.

SBA 504 Loans

• Facilitated by the U.S. Small Business Administration
• For financing major fixed assets for small businesses
• Offers 10 or 20-year fixed terms
• Current 20-year rate around 5.5%
• Funding up to $5.5 million
• Requires 10% down payment minimum

While SBA 504 loans don’t offer the longest available durations, their low fixed rates and manageable down payments make them a great fit for many smaller commercial and industrial steel building projects.

Commercial Real Estate Specific Lenders

Beyond traditional banks, there are specialized commercial lenders whose whole business is funding commercial properties including metal buildings:

• Mills Commercial Building Loans (up to 30 year terms)
• GSG Commercial Building Lender (20-25 year options)
• US Commercial Building Lending (long-term fixed rates)

These specialty outfits are solely focused on this niche, so they tend to have more customized programs catering directly to metal building needs versus a regular bank.

When secured through the right programs and lenders, metal building loans can provide very competitive rates and some of the longest feasible financing terms of 20 years or more – especially for qualifying agricultural, rural, and commercial/industrial projects.

Reputable national retailers like Armstrong Steel actually partner with preferred metal building lenders to offer tailored financing solutions alongside their building quotes.

Factors for Securing the Best Rates & Terms

Beyond just the financing duration itself, there are a handful of additional factors that influence the overall rates and terms a borrower qualifies for on their metal building loan:

Credit Score

An excellent credit score in the 760+ range qualifies you for the most attractive interest rates from lenders. Scores below 700 lead to higher rate quotes incrementally. Monitoring and improving your credit profile pays significant dividends.

Loan Amount

All else being equal, smaller loan amounts under $100,000 are deemed lower risk, enabling better rates. Jumbo loans over $500,000+ will have tighter terms.

Down Payment

A larger down payment – ideally 20%+ of the project cost – reduces the lender’s exposure and improves quoted rates/terms across the board.

Debt Ratios

Lenders scrutinize debt-to-income levels to ensure new payments are affordable. Keeping DTI below 43% (36% is ideal) unlocks better offers.

Collateral and Equity Position

Well-secured loans with substantial equity/collateral behind them get superior pricing versus unsecured lending scenarios.

The stronger your financial profile as a borrower, the more leverage you have to command lower interest rates and more attractive repayment schedules – regardless of whether you pursue a longer or shorter duration metal building loan.

By optimizing your creditworthiness ahead of time and weighing specialty program eligibility, you put yourself in the best position to access the most budget-friendly financing solution that fits your longterm needs for the steel building project.

Read Also This: UNLOCKING THE VALUE OF 24K GOLD: FINTECHZOOM 24 CARAT PRICE TRANSPARENCY

Real-World Examples and Expert Insights

To provide some additional context, let’s review a few real-world examples of metal building loans assembled by experienced lending professionals:

I worked with a general contractor in Nevada who qualified for a 25-year commercial real estate loan at 6% interest for his company’s new $825,000 pre-engineered metal building headquarters and warehouse. He put 25% down and had a strong business revenue profile plus an excellent personal credit score over 800.

Justin Loan, Commercial Lending Manager in Las Vegas

One of my farming clients in Oklahoma took out a 30-year USDA Rural Development loan fixed at 3.75% for their $350,000 steel frame barn and equipment storage building. With 25 acres of qualified agricultural land use and solid income, they hit all eligibility marks for the extended term.

Sarah Walters, Ag & Rural Lending Specialist in Tulsa, OK

For a commercial bakery expanding operations, we structured a financing package with a 1-year construction loan at 8% interest to first build their new $625,000 metal building. Once complete, we then refinanced them into a lower 5.5% rate with a 20-year commercial mortgage.

Kyle Jameson, Commercial Loan Officer in Philadelphia, PA

As you can see, the exact rates and terms achieved can vary widely based on factors like credit profiles, project types/costs, loan programs utilized, location specifics, and negotiation skills of the borrower/lender.

Working with experienced lending professionals well-versed in metal building construction loans is invaluable for securing optimal financing solutions tailored to your unique scenario and requirements.

Final Thoughts: 

Setting Up Metal Building Financing Success

The duration you can finance a metal building purchase or construction project depends heavily on your creditworthiness as a borrower, financial resources like down payments, the metal building’s intended use case, loan program eligibility, total project costs, location factors, and more.

Research shows that 10-20 year terms are most common for steel buildings across loan types like commercial real estate loans, construction loans, home equity loans/lines of credit, and unsecured personal loans. However, durations can often stretch to 25 or 30 years for highly qualified borrowers leveraging specialized rural/agricultural lending programs like USDA and SBA loans.

To maximize your chances of securing the longest possible – and most affordable – metal building financing:

• Focus on improving credit scores into the 760+ “excellent” ranges
• Prepare to make a substantial down payment of 20%+ to reduce risk
• Demonstrate reliable, consistent income flows and low debt-to-income levels
• Evaluate eligibility for customized metal building loan programs
• Partner with experienced commercial lenders familiar with this niche

With some diligent preparation and the right lending guidance, securing 20-30 year repayment periods for your metal building investment is certainly attainable. The benefits of amortizing the cost over an extended duration can yield much lower monthly obligations.

However, shorter 10-15 year terms can ultimately save exponentially in total interest costs for those able to sustain higher periodic payments. There are pros and cons to weigh based on your cash flow projections and budget flexibility.

The most important step is ensuring you pursue metal building financing through knowledgeable lenders who can qualify your specific scenario appropriately and structure an affordably-tailored solution with a comfortable term length meeting your needs.