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Central MN Ethanol Co-op
Growing sustainable fuel for Minnesota.
Location:
Little Falls, Minnesota
Financing:
$4,000,000 SBA 504 loan for a $17,200,000 plant expansion
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Located in Little Falls, the Central MN Ethanol Co-op is the northernmost ethanol plant in Minnesota. The environmentally conscious factory uses locally grown corn for the production of fuel-grade ethanol.
In the northern tier of the Minnesota corn-belt, you’ll find the successful plant of the Central MN Ethanol Co-op (CMEC). Currently it outputs about 21.5 million gallons of ethanol a year.
In 2007, due to the rising costs of natural gas, CMEC needed to find an alternative fuel source to power its plant. Since the area north of the plant is mostly filled with trees, they turned to a process known as biomass gasification to generate the necessary steam for their factory. “It’s all waste wood chips, tree trimmings and millwork industry waste products, so it’s environmentally friendly,” explains Steve Anderson, president of the board of directors.
Naturally, they needed financing for this costly project. And that’s when they opted for an SBA 504 loan from MBFC. Being able to lock in at a low, fixed interest rate and close in a timely manner were the key benefits of the deal. “We were the first SBA 504 to be for $4 million,” states Anderson. “The savings over a conventional commercial loan was about 2 percent, which is several hundred thousand over the course of a $4 million loan.
The reduced interest cost helps our cash flow, and since we are mostly farmers, that money is going right back into the community.”
The end result has been a huge boon for their business. While the need for renewable fuel continues to increase, maintaining cost-effective operations is essential for a prosperous future.
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