DEFINITION of 'Primed'

The act of granting a new lender a higher claims priority over a current secured debt holder. A lender is considered primed when they are surpassed on the priority ladder for a borrower's assets.


A lender may agree to being primed if they feel the new loan can prevent bankruptcy in the company or help increase its financial stability. For example, a company files bankruptcy, but is operating as a debtor in possession. If the firm is offered DIP financing, where a new lender gives the ailing company additional funding, its current lenders would usually be primed to the new lender. The current debt holders might agree to being primed if they believe the new funds will allow the company to recover. In this case, the company would have a better chance at paying off all of its debts in the future.

  1. Absolute Priority

    A rule that stipulates the order of payment - creditors before ...
  2. Debtor-In-Possession Financing ...

    Financing arranged by a company while under the Chapter 11 bankruptcy ...
  3. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  4. Priming Loan

    A form of debtor-in-possession, or DIP financing, whereby the ...
  5. Debtor In Possession - DIP

    An individual or corporation that has filed for Chapter 11 bankruptcy ...
  6. Debt/Equity Ratio

    Debt/Equity Ratio is debt ratio used to measure a company's financial ...
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