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Tecvalco Ltd. and BDC: Challenges on the road to growth in balancing cash flow and growth

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Tecvalco Ltd.

Niagara Falls‑based Tecvalco Ltd., which distributes products for the utility, municipal and manufacturing sectors, planned to expand in Edmonton and into the U.S. market.

Executing the company’s growth plans required an injection of working capital, the purchase of a warehouse in the U.S. and the hiring of a U.S. sales team. However, the distributor encountered cash flow issues due to unexpected obstacles that delayed the delivery of a large order. Moreover, Tecvalco had outgrown the lending norms of its first bank.

BDC recognized the potential of this high‑growth company, which had been in business since 1980 and ranks in the top five supply companies in each market it serves. “They were confident that my company was on the right track,” says Tecvalco President Mike Menger.

BDC provided a working capital loan to cover the carrying costs until the large order was finalized and delivered. A high‑ratio realty loan along with a BDC Equipment Line covered the purchase price of the new properties as well as modernization and renovation costs.

With BDC’s support, Tecvalco moved ahead with its expansion plans while maintaining cash flow for day‑to‑day business needs. U.S. sales increased with the addition of the new employees. Overall sales grew by 20% and profits improved.

Menger considers his BDC account manager to be a trusted advisor. “We’ve developed an invaluable business relationship,” he says. “He makes personalized suggestions that are right on target.”

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