Debtor-in-possession financing

When someone owes a lot of money and wants to keep doing business and pay off their debts, they might need help getting more money to keep going. So, they can ask someone for help, and that person will give them a special kind of loan called debtor-in-possession financing.

This loan is special because even though the borrower (the person who owes money) still has some problems paying off their debts, they are allowed to keep running their business as usual. That is why this type of financing is called 'debtor-in-possession' As long as they can keep making payments on their loan, they can get the extra money they need to keep running their business and to make things right with the people they owe money to.

The people who lend debtor-in-possession financing are usually pretty careful because they know that the person they are lending money to has run into some trouble paying off their debts. So, they might want to check some extra things first, like how the borrower has managed their money in the past, and what their plans are for paying back the loan.

If everything looks good, the lender will agree to give the borrower the money they need to keep doing business, and the borrower will keep running their business and try to pay back the money they owe.