So, you’re planning on building a new steel building? That’s a great decision as steel is one of the most durable and energy efficient materials you can use for construction purposes! As you’re going through the planning of this building, your biggest question probably comes when you think about cost. How are you possibly going to being able to afford this monster? This is a question that plagues many builders as they are starting projects like these.
However, this doesn’t have to be a question that you never have an answer to. We actually have some options below that you can take advantage of! You should make sure to figure this out well before you start the construction process. As you probably know, the price of steel consistently rises, so the sooner you take advantage of the low prices, the better!
Keep reading down below to learn more about the various ways we think will help you finance your steel building.
- Personal Savings
Even though they do cost some money out of your pocket, steel buildings are extremely cost-friendly and affordable to build. That’s because they can be constructed pretty quickly and you can do most of this construction on your own. This is already going to save you tons of money on the potential labor costs that you would see from other types of buildings. And that’s why many builders will opt for paying for their steel building with their own personal savings, which differs from the normal payment method for buildings based on other, more expensive materials.
One of the biggest advantages to using your own personal savings on this project is the fact that you don’t build up debt to a loaner. We all know how it feels to be in debt for a student loan or to our credit card companies. And this definitely something that you don’t want in a project like constructing a steel building. The only big disadvantage when it comes to paying out of your personal savings is that you might have to save up for a while to make that happen. If you don’t have the money right on hand at the moment, it’s going to take even longer for that building to actually come into reality.
However, imagine how it’s going to feel whenever you get that steel building constructed and you completely own it! You won’t have any money that’s owed to a loaner or bank. You’re going to have complete ownership and not be bogged down with calls from the bank to pay back your loan.
Something else that you should keep in mind when paying out of your personal savings are the delays you could see during the construction process. For example, there might be a huge storm that puts you off track and costs your money out of your budget for repairs. Make sure you have enough cushion in your personal savings to pay for these unexpected eventualities.
- Financing or Credit
So, if you’ve decided that you don’t want to go with your own personal savings to finance your steel building construction with Buck Steel, you’re only other option is to go with financing or credit. And there are some big pros and cons to think about when you go down this route and get a loan from a bank. One of those benefits is that it preserves working capital. This means that you’re basically going to be able keep more of your cash as capital – you won’t have to spend it all like you would with using your personal savings. You can use this cash for other things like furnishing your building or paying for some cool upgrades.
However, one of the big obvious disadvantages to using the financing option is that you’re going to have to pay off your building for a much longer period of time. You’re going to be in debt to that bank or loaner for quite some time. Plus, you’re going to have to pay interest on the loan for as long as you haven’t paid it off. This means that the building is going to cost you a lot more in the long-run, thanks to that interest.
So, which types of credit financing is available for you when you want to build this building? You can go with bank financing, credit unions, construction loans, refinancing, home equity lines of credit, and maybe even a cash advance from your credit cards. We would definitely not recommend the last one, however, as that will cause you some super high interest rates from your credit card company.
Once you have decided which financing option you’re going to go with, we’ve got to talk about the process of paying for the building. It all begins when you lock in the price of steel with an upfront payment. Don’t worry! This payment isn’t going to be too big. However, a lot of the times, this payment is going to be nonrefundable, so be sure this is the price of steel that you definitely want to pay. Remember, it’s best to get this payment done ASAP so you can lock in that low price of steel. Usually, after you make this payment, the drawings for your building will begin and you can head to the bank or credit union to ask for your loan.
However, before you take out a loan, make sure building a steel building is actually something that you can afford in the long-term. You don’t want to be burdened by huge loans that you can’t pay for the rest of your life. The best way to go about this is to create an intricate budget that lays out your income for the foreseeable future and understand when you would actually be able to pay off the loan, with interest.
As we mentioned, building a steel building is probably one of the best decisions you could make. Steel is one of the most affordable and durable material that you can use for construction projects. However, make sure you think long and hard about how you’re actually going to finance this project. If you simply can’t afford a building at this moment, it’s best to wait a little bit until you are financially stable.