You are a loan officer for a major Canadian bank. Recently, the bank was approached by Freshwater Ltd. for a large loan. Freshwater is a large producer of widgets. It's the only Canadian company that continues to produce widgets in Canada. The company has been in business for 40 years and continues to be owned by the family that originally started it. Until the early 2000s, Freshwater was the largest widget supplier in the world. Freshwater's market share has declined significantly in recent years. Freshwater is currently managed by the children of the founder. The widget industry has grown increasingly competitive in recent years, with foreign competitors now large players around the world. Fresh water's widgets are known for their high quality and this is the focus of its marketing plan. Despite its struggles, Freshwater has managed to increase sales each year for the last 20 years. However, the company's profits and cash have declined in recent years and management would like a loan to improve its liquidity position. It's asking for a $10 million line of credit, with repayment beginning in the third year.
The loan would be paid off in full in 10 years. Management points to its ability to maintain growth in a highly competitive environment as proof of Freshwater's ability to repay the loan.

Required:
Prepare a preliminary report on whether your bank should provide the line of credit requested by Freshwater. Analyze the market conditions, the impact they are having on the company's performance, and the risks for the future.