Interim Financing Term Sheet (DIP Financing)

Summary

This practice note looks at the interim financing (DIP financing) term sheet — a non-binding agreement in which a lender agrees to provide interim financing to a debtor to enable the debtor to continue to operate as a going concern while it attempts to restructure its debts. It discusses the process for finding and selecting a DIP lender, the benefits of a term sheet and the process for completing the financing, including obtaining the court's approval of the terms and conditions of financing.