Get the funding you need for a successful restructuring.

Simplify your Restructuring Process with Debtor-in-Possession (DIP) Financing

DIP financing is a tool that can help your business get back on track during a formal restructuring process.

When a business finds itself in a situation where it must seek bankruptcy protection by filing of a Notice of intention (“NOI”) under the Canadian Bankruptcy & Insolvency Act, or choose a plan to restructure under the CCAA  (the Companies’ Creditors Arrangement Act), the choice  is often determined by the total debt outstanding. Both options allow the company to avail itself of debtor-in-possession financing.

Filing for bankruptcy protection is an accepted way to turn around a business. At the end of the process, employees still have jobs, suppliers still have clients and customers are also taken care of, and all will benefit from stability at a critical time.

Regardless of the industry or the size of your company, you can successfully restructure your business with DIP financing.

Any company may find itself facing challenges where cost-cutting measures or a new business plan may not be enough to return to profitability, and conventional financing is out of reach. A formal restructuring process, supported by DIP financing, may be the solution.

Debtor-in-possession financing facilities have similar characteristics to standard asset-based loans and can be used by companies in a variety of businesses, i.e. manufacturing, wholesale, service businesses, import & export, and in a wide range of product categories, food & beverage, industrial manufacturing and transport just to name a few.

Our mission is to simplify your restructuring process with financing that is suited to your business.

During formal restructuring, companies often need additional financing while operating under bankruptcy protection. A court can grant a lender, such as Accord, a special priority charge over the assets of the company, allowing it to take advantage of debtor-in-possession financing during the restructuring process.

A DIP financing facility can be critical to a successful restructuring, allowing a business to access the cash it needs to continue operating, especially since most suppliers will require payments on a COD basis. The additional liquidity provided by DIP financing will ensure that your business can continue to meet your commitments to customers throughout your restructuring process.

We want your restructuring process to be a success. We can help make that happen by providing your business with DIP financing.

Our team of professionals has decades of experience in providing DIP financing and offers the expertise and patience needed to guide you through this financing phase.

By choosing Accord for your DIP financing, you open the door to a range of financing options. As your company exits bankruptcy, we can continue to work with you and your team, converting your DIP financing to an ABL line of credit, and offer financing programs to help you achieve your next milestone. Flexible options, which are available both as debtor-in-possession financing and as exit financing, include:

Frequently Asked Questions

Debtor-in-possession financing, often referred to as DIP financing, is a form of financing that can be used by your business while you are operating under bankruptcy protection.

A DIP financing facility provides access to additional liquidity that can be a key component of a restructuring plan.

DIP financing is put in place via a court order. The court approves the debtor-in-possession financing and provides the lender with a special DIP finance charge, or security interest, which ranks ahead of other lenders.

DIP financing provides a business with access to a new loan facility to help finance their operations while restructuring under bankruptcy protection.

When it comes to DIP financing, timing is critical.

If your company finds itself in a situation where you need to seek bankruptcy protection in order to restructure and DIP financing is needed, it will be critical to find a lender that has the ability to put a debtor-in-possession financing facility in place very quickly. At such a critical juncture for your business, any delays in executing your turnaround plan can be serious. <br>

Lenders with experience in DIP financing are familiar with how critical the timing is and will be able to move quickly to put your DIP financing facility in place.

DIP financing can be very beneficial to your company if you are ready to implement a turnaround and restructuring plan. Debtor-in-possession financing can provide you with access to additional cash at an extremely critical juncture when your business may have to pay many of your suppliers on a COD basis.

Having debtor-in-possession financing in place can be the key to a successful restructuring plan.

DIP financing may only be practical for larger loan facilities. As DIP financing is a specialized form of financing and not offered by all lenders, you may find the cost of a debtor-in-possession financing facility to be higher than that of traditional financing.

For example, in order to put a DIP financing facility in place, you will need to work with a specialized team of professionals with specific expertise in insolvency matters. Typically, a lender providing a DIP financing facility will take these additional costs into consideration and fund them as part of the DIP financing facility.

DIP Financing rates vary from one transaction to the next. Typically, rates for debtor-in-possession financing facilities are based on:

  • the type of assets available as collateral;
  • the level of risk; and
  • the nature of your turnaround and restructuring plan.

Given the complexities associated with DIP Financing and the requirement to obtain court approval, you may expect to pay some additional set-up fees related to putting debtor-in-possession financing in place.

Yes, debtor-in-possession financing is often used in the retail industry. Insolvency laws are well suited to helping retailers restructure their businesses and you often see retailers in Canada filing under the CCAA  in conjunction with the use of DIP financing. DIP Financing used during an insolvency filing has helped many retailers successfully restructure their businesses.

DIP financing is one of the many <a target=”_blank” href=”https://www.accordfinancial.com/en/industry-expertise/retail/”>financing vehicles specifically tailored to the retail industry.

Debtor-in-possession financing may be helpful to you if your business has filed for bankruptcy protection and your suppliers have a considerable amount of product ready to deliver but are requiring COD payments.

By using DIP financing, you could pay your short-term operating expenses and make the COD payments to your suppliers, purchasing the inventory that can then be quickly shipped to your customers and converted to accounts receivable.

DIP financing provides short-term liquidity to get your supply chain flowing again, ensuring a consistent revenue stream for your business while operating under bankruptcy protection.

You are best served by a lender with extensive experience providing debtor-in-possession financing. DIP financing can be complex, and DIP financing facilities often need to be set up quickly, so it is critical that you work with a team that has DIP financing experience.
With 40 years of experience providing DIP financing, and with many of our senior management team involved with the Turnaround Management Association, Accord has the experience and expertise needed to quickly put a DIP financing facility in place. Call us for more information on how to put your DIP financing facility in place: +1-844-932-9940 (Canada) / +1-844-725-4225 (US)

Although debtor-in-possession financing is sometimes offered by banks and traditional lenders, the primary sources for DIP Financing in Canada are asset-based and other non-traditional lenders.

Accord, one of Canada’s leading independent asset-based lenders, has extensive experience and expertise both in debtor-in-possession financing and in exit financing for businesses while under bankruptcy protection and once businesses exit from bankruptcy protection. Call us now to learn more about a DIP financing facility for your business: <a href=”tel:18449329930″>+1-844-932-9940</a> (Canada)