Facts about Debtor-In-Possession
Financing
Source: https://www.prestigecapital.com/about-us/prestige-advantage/
 For getting a DIP (Debtor-In-Possession) financing when a business
lands in bankruptcy protection, then a bankruptcy court's approval is
needed. A crucial part of the debtor's request is in the enterprise's
budget that needs or cover up to 13 weeks.
 The process of getting DIP financing starts when the borrower lands
up in a situation where the party pays claims arising, once the case
has administration status. Well, a few pre-bankruptcy claims also
have administrative status.
 The claim includes vendor claims for received a good that to within a
period of 20 days prior to bankruptcy.
Budget negotiation phase:
 During this time period all the commercial financier work their best to
use funds that benefit the collateral and are important for a debtor's
operation. The borrowers get a lot for the operation of their business
and get to reorganize it.
This is the phase where the lenders are in advantage than the
borrowers.
A few debtor-related asks will be defined by a lending institution, Their
ask includes:
1) Funds for inventory
2) Capital expenditures
3) Professional fees
4) Cash flow for critical vendors
Well during negotiation, lenders can get some concession in exchange
for DIP financing.
The roll-up process:




During this phase/process the debtors authorize a new and fresh
loan facility on newly borrowed funds and bankruptcy.
These kind of establishments helps in paying off pre-petition loans.
In the later part all the pre-petition loan is repaid leaving only the
fresh pre-petition loan outstanding.
Roll ups helps in improving a lender's position
by neglecting unsecured creditors.
These were some basics about Debtor-In-Possession Financing which can help
you in your hard times of bankruptcy by enabling you cash flow. There are
various lenders in the market which can provide you with the facility of Debtor-InPossession Financing such as Prestige Capital Corporation. One can consult
Prestige Capital Corporation for Bridge financing. While availing the facility of
Debtor-In-Possession Financing, better understand all the process and keep the
facts in the mind.
SOURCE: https://www.prestigecapital.com/about-us/prestige-advantage/