Every business leader focuses on a few financial essentials to help them remain competitive and grow. Chief among them is working capital. Working capital is the lifeblood of an organization: it keeps your daily operations moving, orders flowing, and your business-as- usual requirements met. Some business sectors, such as grocery stores, rely significantly on healthy cash flow and robust working capital.

When Stew Leonard’s, a beloved farm fresh food store in the New York metropolitan region, sought to expand their business, they required capital assistance and financial expertise to make their ambitious plans come to life. Partnering with M&T Bank helped them build their newest location in Paramus, New Jersey, renovate their existing grocery stores, and chart a path for future expansion. 

A Grocery Store That’s So Much More

Stew Leonard’s has gained a loyal following since it first opened its doors in 1969. The family-owned and operated store provides the freshest dairy, produce, meats and prepared foods possible across its seven stores in Connecticut, New York, and New Jersey. The stores are a family destination for many, filled with animatronic animals and fixtures to keep kids entertained while customers do their weekly shopping.

Stew Leonard’s embarked on an ambitious growth plan and renovation effort, opening one of its newest locations in Paramus, NJ.  To make this a reality, the chain would have to explore its options to broaden its expanding working capital requirements as well as fund store improvements and expansion.

The Working Capital Challenge

As with many grocery stores, Stew Leonard’s operates on thin margins to deliver customer value. Keeping shelves stocked with the freshest goods possible at affordable prices means that working capital can be a challenge.   Expansion can be a costly challenge, particularly in the competitive greater New York City area, which only intensifies the need for working capital.

“We were able to help Stew Leonard’s expand their capital needs to be able to grow and finish their New Jersey location, but also to renovate some current locations. For them, flexibility and customization were key,” says John Parisio, Senior Middle Market Relationship Manager at M&T Bank.

Working capital looks different for every business: for some, working capital demands are high. This is particularly true for grocery stores and can make expansion a liquidity challenge. Financing partners must be able to provide innovative solutions that consider different lending tools as well as ways to harness a business’ existing equity. In some cases, that means tapping into the built-up equity from other store locations.

How M&T Bank Helped

Leveraging equity on existing properties and structuring long-term working capital loans made it possible for Stew Leonard’s to tap into its existing assets with a repayment schedule that fit their needs. The M&T team helped work with the company’s executive management team to find ways that could help make financing and renovation plans feasible without letting specific obstacles, such as restrictive loan covenants, stand in the way of the big picture.

“The company was spending a lot of money to open a new store—first to build out the space and second to fund stocking the shelves with items-you have to allow them time to be able to do it right,” Parisio says.

M&T Bank was able to work with the chain in order to make financing work.  We took a long-term view in analyzing the request, instead of looking at the business as it appeared today, we envisioned what the business would look like once the new location was opened.  Our Banking Team structured a credit package that gave Stew’s the time to grow the cash flow to service all the debt, an approach other banks found difficult to underwrite. It is also important to note that M&T Bank is a full-service bank, providing cash management, currency services and retail banking for Stew Leonard’s and their employees.

“Being an entrepreneurial-minded bank means listening and building our relationships with a consultative approach. It’s essential to provide flexibility to our customers to enable their growth,” says Ira Brown, Head of Middle Market Banking & Area Executive at M&T Bank.

How M&T Bank Can Help Your Business Improve Working Capital

Businesses have an array of banks at their disposal when seeking to raise capital, fund short term borrowing needs, or help explore options to assist in expanding their business. However, not all banks provide the right insights or customized solutions to help generate the same outcomes for their clients.

This is why it’s essential to partner with a bank that’s willing and able to provide your business with a sensible set of alternatives that can help you not  just access working capital, but also build relationships that benefit your long-term ambitions.

“What’s key to our relationships at M&T is our ability to build trust with the owners and executive management teams, and to be a sounding board for potential solutions—whether that’s to expand the business, provide working capital, or to develop constructive debt financing of any sort,” says Parisio.

Companies looking to grow or enhance their working capital have many options at their disposal, but not all of them are alike. Finding the right bank to partner with can be a challenge, but ultimately doing so reaps dividends.

Final Thoughts

If you’re interested in learning more about working capital, fill out our convenient checklist to evaluate whether or not your business could benefit from additional working capital at this time. Be sure to revisit our Managing Through Challenging Times microsite at mtb.com/managing to access other episodes you may have missed within our business owners series.

Fill out our convenient checklist



This article and the content of the checklist are for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.

©2021 M&T Bank Corporation and its subsidiaries. All Rights Reserved.



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