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DISTRESSED FINANCING

Explore financing beyond conventional credit when financial pressure narrows your options.

A business under financial pressure may still hold valuable collateral. Great Elm evaluates its assets, obligations, and repayment prospects case by case.

DEALS WE SUPPORT

When Financial Pressure Limits Conventional Credit

Financial distress can limit access to conventional credit even when a company retains substantial operating assets. Weaker results, heavy debt or tight liquidity can make a traditional lender step back, while the assets behind the business still have value.

Asset-based financing may present alternatives, depending on the collateral, the management team, repayment prospects and the business's broader circumstances. It can be an option with or without bankruptcy proceedings, and each opportunity is assessed on its own facts.

Finance professional reviewing financial documents

COMMON FINANCING CHALLENGES

Why Distressed Borrowers Struggle to Borrow

Financial pressure can narrow a company's borrowing options quickly. These are the circumstances that most often limit access to conventional financing.

Declining or uneven earnings and cash flow can fall short of what conventional underwriting expects, even when the business still has valuable assets.

Missed or tightening covenants and reporting requirements can restrict a company's ability to borrow more or to refinance on acceptable terms.

Asset values, existing liens and appraisal timing all shape what financing is possible and how it can be structured.

When results weaken, lenders often tighten availability or step back, which can narrow a company's options quickly.

FINANCING CONSIDERATIONS

How Distressed Financing Is Evaluated

Distressed opportunities are judged on the assets and the business behind them, not on recent results alone. Great Elm typically looks at the following.

  • Business viability: the operations and a credible path to stability
  • Experienced management: the leadership team and its plan for the business
  • Collateral quality: eligible assets, their values and how concentrated they are
  • Cash requirements: the actual liquidity need and the intended use of proceeds
  • Current creditor positions: which lenders hold security today and where a new facility would rank
  • Proceeding status: whether the situation involves bankruptcy. Financing outside bankruptcy is distinct from court-authorized financing, and only a company in Chapter 11 would consider DIP Financing

RELEVANT FINANCING SOLUTIONS

Financing Options for Distressed Borrowers

Availability and structure are specific to each transaction.

Secured Term Loans

Potential financing supported by eligible assets.

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DIP Financing

A separate, court-authorized structure for applicable Chapter 11 situations.

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Recent Deals

Financing deals that move businesses forward.

Explore our recent financing transactions and discover how we’re helping businesses access the capital they need to grow and succeed.

See More Deals

FREQUENTLY ASKED QUESTIONS

Distressed Financing Questions

Answers to common questions about financing a business under financial pressure.

Existing lenders' liens and rights shape what a new facility can do. A new lender typically needs to understand those positions, including any payoff, consent or release requirements.

Discuss Financing for a Distressed Business

Tell us about your current obligations, liquidity pressures, available assets and financing objectives. Businesses and their advisors are welcome to start the conversation, and Great Elm can evaluate potential asset-based financing structures.

Contact Our Financing Team

Tell us about your business and what you’re looking to finance. A member of our team will follow up to discuss your needs and potential next steps.