INTRODUCTION
Materiaux Boisvert Ltée sells hardware and building materials to retail customers as well as industrial contractors. Founded in 1992, the company has undergone many management changes. In 1996, the company was purchased by Produits Forestier Saguenay (PFS), whose goals were focused primarily on making money. Tension arose between management and employees, which resulted in the unionization of employees in 1997. Growing tension resulted in three consecutive years of losses for Materiaux Boisvert. In September of 2001, the Lachappelle’s purchased the company. The new owner of the company, Francois Lachappelle, is requesting a line of credit increase contrary to the commercial account manager’s forecast. Francois is calling for an increase in the company’s line of credit from $1.6 million to $2.2 million, whereas previous financial forecasts predicted that Materiaux Boisvert would only need $1.8 million.
OFFER
We propose that you, Yvan Martinault, should increase in the line of credit to $2 million with a 9% risk premium, deviating from Francois’s initial request for $2.2 million. In order for to grant this increase in their line of credit, three conditions must be met: that the money loaned will be used to reduce Materiaux Boisvert’s payable days from 93 to 65 days, that the loan will be secured by using the company’s receivables and inventory as collateral, and that Materiaux Boisvert will maintain a current ratio of 1.25.

ANALYSIS
SWOT Analysis (Exhibit 4):
Materiaux Boisvert’s strengths lie in its emphasis on customer service, strong relationships with the bank and loyal clients, and their ability to take advantage of negotiated prices.
The company’s weaknesses revolve around the company’s past performance under PFS. This includes Materiaux Boisvert’s poor financial performance and the unionization of its workers. The owner of the company,