Factoring & Chapter 11

 

Chapter 11, which is also known as "Debtor in Possession" (DIP),  is very complex.

 

Very few commercial finance companies, including invoice factoring companies, provide DIP financing to small businesses in Chapter 11, because it is such a substantial undertaking requiring special expertise.

 

They also fear that the reorganization, which is the purpose of Chapter 11, will fail and the case will be converted to a Chapter 7 liquidation putting their funds at considerable risk, and that they will have to hire outside legal counsel to draft the required legal documents to protect their DIP advances, make Bankruptcy Court and Creditor Committee appearances, etc., all of which will be too costly.

 

Photon Funding, LLC has the necessary Chapter 11 experience and can provide DIP invoice factoring services to its clients by working closely with their bankruptcy counsel free of charge, provided that all interested third parties, such as the IRS, if applicable, sign the necessary agreements or stipulations, and  Bankruptcy Court signs the necessary orders. 

Factoring & Chapter 11

 

Chapter 11, which is also known as "Debtor in Possession" (DIP),  is very complex.

 

Very few commercial finance companies, including invoice factoring companies, provide DIP financing to small businesses in Chapter 11, because it is such a substantial undertaking requiring special expertise.

 

They also fear that the reorganization, which is the purpose of Chapter 11, will fail and the case will be converted to a Chapter 7 liquidation putting their funds at considerable risk, and that they will have to hire outside legal counsel to draft the required legal documents to protect their DIP advances, make Bankruptcy Court and Creditor Committee appearances, etc., all of which will be too costly.

 

Photon Funding, LLC has the necessary Chapter 11 experience and can provide DIP invoice factoring services to its clients by working closely with their bankruptcy counsel free of charge, provided that all interested third parties, such as the IRS, if applicable, sign the necessary agreements or stipulations, and  Bankruptcy Court signs the necessary orders.