Working Capital While Your Restructuring Proceeds.
Debtor-in-possession financing for businesses in Chapter 11 reorganization. Court-supervised working capital that keeps operations running while you restructure — without disrupting the bankruptcy process.
DIP Specialist
DIP financing requires specialist counsel — not a web form.
Every DIP structure is unique to the debtor’s circumstances, the bankruptcy court, and the creditor committee’s requirements. Contact our DIP team directly.
Counsel and financial advisors: we work directly with your professionals. All discussions are confidential. Court approval process support available.
$900M+
Purchased Invoices
48 Hrs
To First Invoice Funded
97%
of Clients Fund Again
Non-Recourse
Options Available
How DIP Financing Works
The Court Approval Process
01
Initial consultation with DIP team
We review the debtor's A/R aging report, customer list, and current case status. Debtor's counsel and/or financial advisors participate. We propose a term sheet within 48–72 hours of receiving materials.
02
Interim order motion filed with the court
The debtor files a motion for authorization to obtain post-petition financing. Courts typically hold an interim hearing within 2–5 business days of the filing to approve an interim order allowing immediate limited draws.
03
Interim funding commences
Upon entry of the interim order, Sigma can begin funding against eligible A/R within the approved borrowing base. Payroll and critical vendor payments can be addressed immediately.
04
Final order hearing (typically 21–30 days)
The court holds a final hearing for approval of the full DIP credit agreement. Creditors may object. Sigma's team works with debtor's counsel to address any committee objections before the final hearing.
05
Full facility operates through reorganization
The DIP facility provides working capital through plan confirmation or sale. The facility is repaid in full at exit — through the reorganized company's new financing, or through a 363 sale proceeds.
Can a DIP lender also hold pre-petition debt?
Yes, but the structure requires careful attention to rollup risk and potential conflicts with the creditor committee. Sigma can act as either a new DIP lender or an existing creditor providing a DIP facility — the appropriate structure depends on the specific case dynamics and existing credit agreements.
What happens to the DIP facility in a 363 sale?
In a 363 asset sale, the DIP facility is typically repaid at closing from the sale proceeds before any distribution to pre-petition creditors. The DIP lender’s superpriority status ensures repayment ahead of most unsecured creditors. If Sigma is the DIP lender, we can also structure credit bid rights for the A/R collateral if appropriate.
What collateral does Sigma accept for DIP facilities?
Sigma’s DIP facilities are primarily accounts receivable-based. The debtor must have an identifiable portfolio of creditworthy B2B customers with outstanding invoices. We review the A/R aging, customer concentration, and quality of receivables as part of DIP underwriting. We can also include inventory as supplemental collateral in some structures.
Is non-recourse protection available on DIP receivables?
Yes. Where the underlying receivables are from creditworthy customers and the DIP structure supports it, Sigma can offer non-recourse protection on specific receivables — absorbing the loss if an eligible customer becomes insolvent during the DIP period. This is a meaningful risk mitigation tool for industries with large single-customer concentration.
Live Capital Markets
DIP Financing Starts with a Conversation
Contact our DIP team directly. We work with debtors' counsel, financial advisors, and creditor committees. All discussions are confidential.
- All inquiries confidential
- No personal guarantee on A/R facilities
- Court approval required