Debtor-In-Possession (DIP) Financing for Beginners

Learn the basics associated with debtor-in-possession lending

Debtor in possession financing is a loan extended to a defaulted borrower that allows them to keep their assets while undergoing a bankruptcy proceeding or other restructuring plan. These loans are usually short in nature and are meant to give the business financial stability in the form of a cash infusion, while still showing that the company has assets to sell or utilize for the purposes of restructuring.

Take the time to learn about debtor-in-possession (DIP) financing and see how a loan of this nature may help your business in a time of need. Here are some resourceful links to get you started. Think of this tutorial as "debtor-in-possession (DIP) financing for beginners.

1. Read resource websites that given an overview of DIP financing.

2. Find companies that specialize in debtor in possession financing and set up a consultation for your business.

3. Locate and read the laws associated with debtor in possession financing so that you know the rights of your company while undergoing the process.

 

Find financial websites that detail debtor-in-possession (DIP) financing and how it operates

There are many financial websites dedicated to the explanation of some of the complex strategies associated with restructuring debt for corporations. Find the websites that detail and explain the process of DIP loans and how they can help a company re-organize debt so that it can emerge from bankruptcy proceedings and get back on the right track.
Try: Visit the website of First American. This is a financial resource tool in a multitude of areas including explaining DIP lending. Also visit the website for All Business for a further explanation of debtor-in-possession loans.

Locate companies that perform debtor-in-possession financing and have a consultation

There are many companies throughout the United States that specialize in providing a DIP loan to a company in need. Take the time to seek out these companies, set up a consultation so that you may learn how the process works, and see how a DIP loan might apply to your company. Things that will be discussed at the meeting are the assets of your company, any potential debt and the potential earnings projections for the next several quarters or years.
Try: Go to the website for Haynes and Boone. There you can read more about the DIP lending process. Also, Ocean Pacific Capital is another lender that specializes in DIP loans. Visit this website for more information.

Find and read any associated federal or state laws pertaining to debtor in possession financing

Both federal and state laws may apply to your situation if you are trying to secure a DIP loan while going through a bankruptcy proceeding. Be sure to learn about the laws that apply to your situation so that you may maximize the protections given to your company while undergoing a bankruptcy proceeding. You might also want to consult a bankruptcy attorney when researching this matter as such laws are consistently changing.
Try: Visit the official website for the US Courts and read about the debtor in possession laws and how they relate to filing chapter 11 bankruptcy. The financial company Osler also details some of the DIP loan laws on its website.

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