Client

Winter Cooperative

Founded

1929

Headquarters

Winter, WI

Background

Winter Cooperative has been a cornerstone of the Winter, Wisconsin local community since 1929. For nearly a century, they have provided grocery and hardware supplies to the region. The Cooperative is the only grocery store within a 10-mile radius of the town of Winter.

Like all grocery stores, Winter Cooperative has necessary refrigeration systems to ensure perishable food stays at the proper temperature.

Unfortunately, the Co-op’s refrigeration system was coming to the end of its lifecycle. The coolers were old and needed replacing, and the Freon that the Co-op had was completely used up and no longer viable.

The entirety of Winter Cooperative’s refrigeration equipment needed to be replaced. The Co-op confronted the harsh reality that they either had to fully update their cooling systems or potentially close the store.

If the Winter Cooperative closed, the rural community that the Co-op serves would face significant hardship in meeting needs for essential groceries and supplies.

When Winter Cooperative identified that it was time to do a full replacement of all refrigeration systems, they brought this funding opportunity to their bank. Winter Cooperative had been banking with the same local bank which is conveniently located directly across the street from the Co-op for many years. The Co-op’s mortgage on their building was funded by this bank.

Winter Cooperative found that the total cost of the cooling upgrades would be around $350,000, however, their bank shared that they would not extend any further credit to the Co-op, and they were unwilling to sign-off on the C-PACE financing.

This lack of funding halted the refrigeration project and threatened the future of the Co-op.

How a rural grocery cooperative leveraged the C-PACE financial solution to save their store and continue to be a cornerstone of their community

Winter Cooperative’s future looked uncertain when their bank would not finance necessary refrigeration upgrades. Read on to learn how an essential community store that supplies and connects a region benefited from personalized service, unique financial industry knowledge, and a refusal to give up.

Overview

Community-based grocery and hardware store Winter Cooperative has served their local community for nearly a century. To stay in business, Winter Cooperative needed to embark on a project to replace and update all of the store’s refrigeration equipment.

Challenge

Winter Cooperative’s banking partner would not extend further credit to the store to fund the $350,000 refrigeration upgrades.

 Financing Solution

AFN stepped in to find a solution, identifying C-PACE financing as a great option to fund the refrigeration replacements. AFN identified a new banking partner to sign off on C-PACE financing, paid off the Cooperative’s previous bank, and refinanced their mortgage. Finally, AFN also structured a payment plan for the necessary refrigeration equipment.

Outcome

Winter Cooperative successfully financed all of the refrigeration equipment for the store. As a result, the Cooperative is now well-equipped to serve future generations of the region.

AFN’s Approach

Tom Armstrong, AFN’s VP of Northern Wisconsin, had already had a relationship with the board of Winter Cooperative from his previous company. When Tom joined AFN in late 2022, he brought the Co-op to AFN for the opportunity to find solutions to keep the Co-op serving its community.

American Financial Network (AFN) then teamed up with the Co-op in late 2022.

AFN’s approach to building a solution for Winter Cooperative included detailed research, deep industry knowledge, and personalized solutions.

Financial Analysis:

Tom and the AFN team immediately began to investigate and explore Winter Cooperative’s financial history and performance.

Through this analysis of the Co-op’s finances, AFN identified a highly specialized financing product that could fit the Co-op’s needs. This solution is called Commercial Property Assessed Clean Energy financing, also known as C-PACE.

C-PACE Solution Identification

C-PACE is a one-of-a-kind financial program. It enables property owners to obtain low-cost, long-term non-recourse financing for energy efficiency, renewable energy, and water conservation improvements made to buildings.

C-PACE financing is  heavily reliant on property value rather than the underlying operating company’s financial performance.

The challenge of achieving C-PACE financing came down to the fact that this program requires the consent of any bank that holds a mortgage on the property of the operating company.

Established New Banking Partner

The bank that held Winter Cooperative’s mortgage was not willing to consent to C-PACE financing.

To prevent the refrigeration financing from stalling out, AFN identified and brought in one of its partner community banks, German American State Bank. German American State Bank refinanced the Co-op’s mortgage and then consented to C-PACE financing.

Structured Refrigeration Equipment Loan

AFN structured a 20-year payback period on the entirety of the refrigeration equipment at competitive rates.

How AFN Helped Winter Cooperative

AFN delved into Winter Cooperative’s financial history, banking relationships, and needs extensively. Then, they rapidly put all of their research into action. AFN remained undeterred in finding a financing solution to ensure Winter Cooperative’s ability to serve their community in the future.

Winter Cooperative was impacted by AFN’s help in the following ways:

  • C-PACE Solution Established
    • AFN’s financial industry knowledge brought the C-PACE financial solution to the Co-op. The C-PACE financing program is not very well known throughout the banking industry and provides a fantastic option to applicable businesses.
  • Built Relationships
    • AFN both found a new banking partner when Winter Co-op’s bank blocked C-PACE financing and introduced the relationship between German American State Bank and the Co-op.
  • Refinanced Mortgage
    • The refinanced mortgage paid off Winter Co-op’s bank and allowed the Co-op to pursue a new relationship with German American State Bank in order to move forward with C-PACE financing.
  • Structured Payment Plan for Refrigeration Equipment
    • All of the above steps made it possible to receive financing for the refrigeration equipment that Winter Cooperative needed to keep their community supplied.

Saving a business from closing is very gratifying. Without this funding, the system was going to eventually fail. Without coolers, a grocery store can’t really serve a community or an area!

Tom Armstrong

AFN's Results

AFN provided Winter Cooperative with personal service and refused to quit when challenges arose. Through deep financial and banking industry expertise and determination, AFN’s team found a solution to keep the Co-op’s doors open to provide its rural community with life’s necessities for years to come.

Results of AFN and Winter Cooperative’s partnership include:

  • A well-stocked community store to serve the Winter, Wisconsin area
  • Completely upgraded refrigeration equipment
  • A new banking relationship
  • Previous bank paid off in full