PET Food Processing - March 2022 - 9

when applying for financing. Don't send in financial information
piecemeal.
Honing the process
Banks prefer cash but will also look at existing land,
buildings and equipment that are paid for or paid down
enough to equal the equity injection. Typically, a bank
will want at least 30% equity in a project. If a business is
working with a state or city program, there will also need
to be public hearings that can take 90 days once the information
is received, shared Carol Anderson, executive
director, Morrison County Community Development,
Little Falls, Minn.
For example, when working with state funding, a business
cannot order equipment, purchase the land (unless
it's already owned) or do anything until the application
is submitted and signed off by the state. If equipment or
a building is ordered, the business is essentially saying
the project is moving forward. This will kill the funding
for state or tax increment financing (TIF) programs,
Anderson cautioned.
Offered by communities and states, TIF is used for
building demolition and/or construction. The program
looks at the value of the parcel of land as it is presently
and then what the value would be with improvements
on the land. This is based on tax value and the difference
in the taxes generated can be rebated to the company
when it's time to pay property taxes.
Funding through TIF can be used in a variety of ways
including land purchase, footings, foundations and
parking lots - anything that's in the ground or directly
on the ground. A company using TIF cannot apply to
have its taxes lowered once they've asked for a larger
amount of value for generated funding.
Planning should include allowances for supply chain
disruptions, errant or rising costs, and other potential
pitfalls that could pop up along the way. Businesses can
also find themselves in a tight spot if they take on too
much debt, hampering cash flow for an extended period
of time. This could create the potential that the " lowest
cost " option could come with the most restrictions, limiting
the ability to grow one's business.
Anderson also recommends not doing press releases
announcing a business is located in a community. This is
important because of the " if but for " clause, meaning the
business is saying to the community and/or state that the
project cannot be done without this funding.
Top: Cashflow funding supports inventory management and can
reduce the impact of supply chain challenges.
Middle and Bottom: Investment in equipment is a key part of
financial planning and overall equity of the business.
Sosland Publishing Co.
www.petfoodprocessing.net | March 2022 | PET FOOD PROCESSING 9
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PET Food Processing - March 2022

Table of Contents for the Digital Edition of PET Food Processing - March 2022

PET Food Processing - March 2022 - Intro
PET Food Processing - March 2022 - 1
PET Food Processing - March 2022 - 2
PET Food Processing - March 2022 - 3
PET Food Processing - March 2022 - 4
PET Food Processing - March 2022 - 5
PET Food Processing - March 2022 - 6
PET Food Processing - March 2022 - 7
PET Food Processing - March 2022 - 8
PET Food Processing - March 2022 - 9
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PET Food Processing - March 2022 - 11
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https://digital.petfoodprocessing.net/sosland/pfp/2020_12_01
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https://digital.petfoodprocessing.net/sosland/pfp/2019_10_01
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https://digital.petfoodprocessing.net/sosland/pfp/2018_12_01
https://digital.petfoodprocessing.net/sosland/pfp/2018_09_01
https://digital.petfoodprocessing.net/sosland/pfp/2018_06_01
https://digital.petfoodprocessing.net/sosland/pfp/2018_03_01
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