DIP Financing

DIP financing, or Debtor-in-Possession financing, is a special type of financing provided to companies that are undergoing bankruptcy. It allows these companies to borrow money while they restructure and try to recover. This funding is prioritized over existing debts, enabling the company to maintain operations and pay critical expenses, like salaries and suppliers, during the bankruptcy process. DIP financing helps stabilize the business, making it more likely for them to emerge successfully from bankruptcy and continue operations, which can benefit creditors and employees.