DIP- Debtor in Possession Second Mortgage Closed- Boca Raton, Florida

Gelt just closed on a Debtor in Possession for a nonprofit in Chapter 11 Bankruptcy in Boca Raton, Florida. Hear how it all went down from our expert team!

“Marcy: Hi, we’re back again.
Jack: We’re on, Marcy. We didn’t leave the desk.
Marcy: We’re very chatty today.
Jack: This is our third video in a row, so we just closed a Debtor in Possession, or DIP loan. Which is, let me give—
Marcy: So, like, Jack’s gonna explain what DIP is. It’s specialty; it’s very specialized.
Jack: Yes, a debtor in possession. When a company or individual files for Chapter 11 bankruptcy, they’re called debtor in possession. It’s a long explanation, but you can Google debtor and possession, and any financing has to be court-approved. It’s a whole complicated thing. I actually did a fantastic video explaining DIP loans; you can look it up on YouTube. But we happen to believe, believe it or not, we’re experts on DIP lending. We’ve been doing it for decades, and most lenders don’t know what they’re doing, and it’s a real specialty, and they shy away from it. But we just closed a DIP loan, a debtor in possession, and it was a specialty building. Happened to be in South Florida; it was a specialty school building. I think there was, it was like a private school or something like that.
Marcy: It was, like, you know, also, like, pretty much a community center for the area.
Jack: Community center. Borrower in bankruptcy, in bankruptcy in foreclosure, specialty building, and we provided in a second; we provided them with financing. It was referred to me by the bankruptcy attorney. We approved the deal, literally on the phone. I got him a term sheet, I think that night, or the next morning. I went back and forth with the attorney a little bit. The deal had to be finessed a little bit because when—
Marcy: Because, again, you have to go in front of the judge; it has to be approved.
Jack: And when you’re going for the job, the judge has to approve it. Typically, the U.S. trustee has to approve it, and there typically can’t be objections. Or if there are objections, they have to be dealt with in the court by all the creditors. So, we finessed the term a little bit. Within 24-48 hours, we got a term sheet filed in court. The court approved it. We closed it, a little bit of a different deal. But we really have developed a specialty in some difficult deals, workout deals. We do a lot of workout deals, debtor in possession, note on note financing, discount no purchase financing deals, literally throughout the country. And I’m excited about this one. You know what?
Marcy: It is because we’re helping him out.
Jack: That’s exactly what I was gonna say.
Marcy: You know what I mean? You know, we’re a non-bank lender, and I know that our fee, you know, it could be a little more expensive, but we’re helping people out.
Jack: This guy particularly, I personally never met him, but one of the guys in the office happens to know him, and they told me during COVID this guy used to get up at like 3:00 or 4:00 in the morning and cook meals for families who needed food. And you know, the fact that we’re supporting him when he’s being, I’m not saying anything in violation or anything publicly; it’s in bankruptcy, it’s a foreclosure, you know. And we’re helping him gives us tremendous satisfaction. Self-understood, we’re making money with it; we’re not doing it for free. But it’s really a specialty—
Marcy: It’s business, but we’re explaining to you that—
Jack: More people should focus on it.
Marcy: And we know how to do it. It’s, and honestly, it doesn’t get bogged down in our system. It’s in here. We do the work. We do everything that needs to be done, and we get it closed. And that’s the difference. You know we know what we’re doing, so it just doesn’t sit, and we don’t give false or fake promises. They’re all real. It’s going to happen. We’ll get it done.
Jack: Excited to do the DIP loan. Remember, we’re doing all kinds of commercial real estate. Our loan amounts are typically $100,000 to $3 million, $4 million, or $5 million bucks almost all over the country. You know, 1 to 5-year deals. Actually, I just approved the deal yesterday for 7 years. But generally, 1 to 5-year deals, short-term deals. You know “When your bank says no, we say yes”. Says it all. And I’m adding a new tagline, “home of the 10-day or less close.” Most of the deals we’re doing are closing in literally days because someone else dropped the ball. They’re coming to us, and they need to close quick, and we’re doing it.
Marcy: Yep, and I’m the best at that.
Jack: Marcy’s the best. That is. Check us out at geltfinancial.com, like the YouTube, leave a comment. Any questions, we’ll answer. And most important, have a fantastic day. Take care.”