-14- 



Combined, the funds available to the two associations id-ll be between 

 $314,950 and $954,900, or roughly $925,000. No consideration is 

 given to the excess of current assets over current liabilities 

 as a source of funds because of the need for t/orking capital. Neither 

 are the investments that each association has in other cooperatives 

 considered as sources of funds because of their less liquid nature, 

 that is, a certain period of time would be required to convert them 

 into cash, even if this were desirable from other standpoints. 



By comparing the amount of funds that are available — both in- 

 dividually to the cooperatives and combined -- with the need for 

 funds under various alternatives, guides are obtained to evaluate 

 the alternatives. For example, if an association decided to rebuild 

 its otm facilities, it would perhaps need a 200,000-box unit (table 1). 

 This would cost approximately $522,400, not including land or 

 railroad siding (table 2). If the association had settlement funds 

 totalling $450,000, this would mean that a minimum of $72,400 vrould 

 have to be borrowed, or a larger amount would have to be borrowed 

 if part of the growers' equities x;ere paid in cash- 

 As another example, if the tV70 associations decided to jointly build 

 one 400,000-box unit (table 1), and this v/ould cost approximately 

 $855,000, then the combined settlement funds of approximately $925,000 

 could be used to ovm the large-scale facility debt free, with approxi- 

 mately $60,000 to be applied tov/ard vjorking capital needs, land and 

 railroad siding, and/or retiring some of the oldest grower equities. 



These, of course, are merely examples, but they suggest a way to 

 evaluate the financial aspects of the various alternatives. But in 

 addition to the factors discussed above there are two other aspects 

 to be considered. One is the availability and cost of borrowed 

 capital, and the other is the financial position of the individual .... 

 grower -member s . 



Regarding the availability of borrowed capital, it should be remembered 

 that in general the greater the equity of members in an association 

 the more easily capital can be borrowed, and generally on more 

 favorable terms. In other words, if growers show their strong support 

 of a packing facility by investing a substantial amount in it, then 

 financial institutions - including the Spokane Bank for Cooperatives 

 could reasonably be expected to lend additional needed funds. 



