Debtor-in-Possession (DIP) financing is a specialized form of financial assistance designed for companies that have filed for bankruptcy protection under Chapter 11 in the United States or CCAA in Canada. It enables companies to continue operations, pay employees, meet obligations, and develop a structured restructuring plan — all while under court protection.
Unlike traditional loans, DIP financing is tailored for distressed businesses and includes provisions that preserve operational control for the existing management team. This makes it a key tool for companies looking to achieve a business turnaround and maintain asset preservation.
At Express Business Funding, we don’t just offer interim financing—we pair it with expert guidance, legal counsel support, and financial advisors to help companies regain control.
Key Takeaways
- DIP (Debtor-in-Possession) financing supports businesses in bankruptcy or financial distress by providing critical interim funding during restructuring.
- Companies should apply early—before operations are severely impacted—to maximize options and demonstrate proactive leadership.
- Express Business Funding offers not just financing but also expert legal, financial, and strategic support to guide clients through the full process.
- DIP financing helps maintain operational continuity, preserve assets, and build stakeholder confidence while aligning with a clear business recovery plan.
- A step-by-step approach—from financial assessment to court approval—ensures structured execution and lender trust.
When to Apply for DIP Financing
Timing is critical when applying for DIP financing. Ideally, companies should begin exploring DIP financing well before operations are severely impacted by financial distress. Early action improves the likelihood of securing better terms and demonstrates proactive leadership to creditors, employees, and other stakeholders.
Starting discussions early gives the company time to gather important documents. These include financial statements, debt disclosures, and business plans. It also allows the company to look at different options for lender negotiations. Whether you foresee operational instability or are already managing declining cash flow, DIP financing may be your most strategic next step.
Additionally, early exploration of DIP financing helps manage perceptions internally and externally. Showing a well-thought-out business strategy and commitment to long-term recovery can go a long way in retaining the confidence of your staff, customers, and suppliers. The earlier this facility is considered, the more options you’ll have available.
Why Choose DIP Financing?
DIP financing plays a crucial role in helping businesses restructure while continuing to function. Here’s why it can be an effective solution:
- Operational Continuity: Keep your company running while undergoing restructuring. This avoids the disruption that often follows a bankruptcy declaration.
- Asset Preservation: Rather than liquidating critical equipment or resources, you retain them to support ongoing operations and future growth.
- Legal Compliance: Work with seasoned legal and financial advisors to ensure all actions are within the scope of relevant laws and court requirements.
- Stakeholder Confidence: Show suppliers, employees, and investors that you’re taking structured, responsible steps toward stability.
- Business Strategy Alignment: Use funds to execute targeted restructuring goals, strengthen leadership decisions, and stabilize key departments.
- Access to Expert Support: Unlike other funding options, DIP financing from EBF comes with built-in access to strategic advisors and turnaround consultants.
Step-by-Step Process to Secure DIP Financing
Securing DIP financing isn’t instantaneous—it involves careful planning and collaboration. Below is a breakdown of the typical steps involved:
1. Assess Your Financial Health
Start by identifying the core issues affecting your company’s financial health. Review your financial statements, assess cash flow, and project future obligations. This step helps determine how much funding is needed and how quickly.
Bankruptcy and restructuring are complex. Work with advisors who specialize in corporate finance, restructuring, and legal compliance. These experts will guide you through court filings and lender evaluations.
3. Develop a Comprehensive Business Plan
Build a plan that outlines your restructuring goals, operational priorities, and how you’ll use DIP funds to recover. Strong business plans show lenders and courts that your organization has a roadmap to success.
4. Identify Potential Lenders
Search for funders who understand debtor-in-possession financing. Evaluate interest rates, terms, lender reputation, and experience with companies of your size and industry.
5. Initiate Lender Negotiations
Begin conversations with chosen lenders. Be transparent about your situation and goals. Ask questions about repayment terms, flexibility, and how they’ve handled past DIP deals.
6. Prepare and Submit Applications
Your application will need supporting documentation—updated financial statements, legal filings, and your business plan. Having this information ready shows professionalism and builds lender trust.
7. Undergo the Due Diligence Process
Lenders will conduct a thorough due diligence process to validate your claims and review your plan. Address inquiries quickly and accurately. Your advisors will play a key role here.
8. Finalize Agreements and Court Approval
Once approved, finalize the contract with your lender and legal team. Submit your case to the court for final approval. This step ensures that all parties—especially creditors—are protected.
9. Implement Your Restructuring Plan
With funding secured, begin executing your plan. Prioritize areas that impact daily operations and long-term growth. Monitor progress closely and keep stakeholders updated.
How DIP Financing Supports Your Turnaround Strategy
For many companies, DIP financing is the foundation of a broader business restructuring initiative. It allows business leaders to make critical adjustments in a protected, structured environment. Whether your goal is downsizing, shifting operations, or exploring mergers, DIP funds ensure you have the resources to act without delay.
Additionally, the process creates discipline around financial planning. With lender oversight and structured reporting, your leadership team is encouraged to focus on outcomes that protect cash flow and build long-term sustainability.
DIP financing can also signal strength. Despite being in bankruptcy, a funded, operational company with a sound plan demonstrates resilience and attracts new partners, talent, and customers.
Why Work with Express Business Funding?
At EBF, we provide more than financing—we deliver structured solutions to support distressed companies through every stage of the DIP process. Our team combines funding access with hands-on support and professional guidance tailored to your restructuring needs.
DIP financing is not solely a financial transaction. It is a strategic tool that demands timely decisions, expert insight, and a clear roadmap for recovery.
Here’s what you get when partnering with us:
- A turnkey DIP financing solution with built-in legal and financial support
- Strategic input from experienced financial advisors and restructuring consultants
- Direct help navigating court documentation and approval timelines
- Transparent communication throughout the entire funding process
We proudly serve companies across Canada and offer full support with additional services such as:
If your business is filing for CCAA, facing delayed payroll, or trying to stabilize supplier relationships, EBF is ready to help. Our team delivers more than capital—we bring clarity and strategic support tailored to your needs.
Ready to Rebuild with Confidence?
Bankruptcy is not the end. It can be the start of a smarter, leaner, and more strategic business model. With the right plan and the right partners, your company can emerge stronger.
Contact Express Business Funding to learn more about how our DIP financing services can support your recovery journey.
Let’s build a path forward—together.
