DIP Financing
Help grow a stronger company with Baker Street Funding's DIP financing.
Baker Street Funding provides DIP financing to owners of companies filing Chapter 11 bankruptcy. Our financing is non-recourse and it can help you build a stronger company so you can regain and secure financial footing—all in one place and with no risk.
How can DIP financing help?
Debtor-in-Possession (DIP) helps companies facing financial distress access capital when they need it the most. Baker Street Funding understands that your ability to receive additional finance from existing providers can be harmed or even become inactive regardless of your financing streams continuously diminishing. Debtor In Possession, or DIP lending, allows owners of insolvent businesses to restructure, pay off liabilities, order supplies, and more. Our Debtor-in-possession (DIP) financing also enables a corporation to obtain that extra funding needed in order to continue business activities during a Chapter 11 bankruptcy.
So much more than DIP financing.
DIP financing through Baker Street Funding can operate in a variety of beneficial ways. The debtor can use Baker Street Funding for operating expenses, chapter 11 expenses, and litigation-related expenses.
Find a better alternative to conventional loans.
Litigation funding is an attractive substitute, or complement, to conventional lender financing for the estate. We assist the estate in more accurately assessing the value of its claims and focus on those with the best chance of a significant recovery.
Access non-recourse funding for your convenience.
Another significant advantage is that litigation support is non-recourse, which means that we, the funder, only earn a return on our investment if the case is successfully resolved.
Get financing faster than other companies.
We work closely with bankruptcy lawyers and businesses to simplify the Debtor in Possession (DIP) financing process. This approach helps you get the capital you need quickly.
Get the capital your company needs.
If you decide that Chapter 11 bankruptcy is the best choice for your company, DIP financing can provide a good opportunity to help you turn it around. Baker Street Funding, as your DIP Lender, can give our years of DIP experience. We provide law firms and their clients the funding they are seeking for a better tomorrow. Learn your litigation financing options for DIP / Chapter 11 Bankruptcy today.
Learn more.
Chapter 11 bankruptcy helps troubled, cash-strapped owners to rebuild and reorganize rather than liquidate. However, since the owners of companies in Chapter 11 often do not have the cash on hand for compensation and negotiating strength, they often discover that it takes far more time and effort to raise the money than they expected. Learn more about DIP financing and the difference between lenders, thus, you can make the right choice.
What can one use DIP lending for?
Companies in bankruptcy typically have inherent cash flow problems, and traditional lenders are usually unable to provide them with traditional loans. Non-recourse financing will help bridge the gap during the restructuring process by funding:
- Operating and overhead expenses
- Payroll
- Attorney expenses
Furthermore, with our risk-free funding in place, the company has access to capital to effectively work with its creditors, giving it more time to discuss and fix organizational, financial, and operational issues.
Overall, the debtor in possession funding allows the corporation to control the property following a Chapter 11 bankruptcy filing and offers the financing, time, and resources needed to reorganize for a fresh start.
Financial institutions vs. DIP litigation funders
Conventional financiers are often reluctant to lend to small businesses in financial distress, even though the restructured company represents a promising investment. The next step could be to look to existing shareholders as lenders, but lenders cannot be insiders.
Companies must exercise caution when turning to alternative lenders because the intention to provide capital must be to assist the company rather than purchase it and its assets.
Difference between Exit Financing and DIP financing
Debtor in Possession (DIP) funding is a component of a company’s Chapter 11 bankruptcy working capital plan. The financing is available as the company goes through a reorganization, intending to ultimately emerge from bankruptcy with a stronger balance sheet and a strategy to move forward.
On the other hand, Exit financing is the company’s post-bankruptcy funding package. In smaller transactions, lenders often agree and commit to both a debtor-in-possession and an escape facility at the same time.
Factoring and DIP financing
Factoring may also be used as a funding method in DIP financing by businesses. Many small business owners are unaware of the prospect of factoring. It is one of the most adaptable methods of obtaining funding and recapitalization during the Chapter 11 bankruptcy process.
Factoring will benefit both the borrowing business and the factoring company. The borrower earns much-needed financing, and the factoring firm gains preference status under the Bankruptcy Code.