Sears gets an extra $350 million for the start of the holiday sales season

Hoffman Estates-based Sears Holdings Corp. nailed down a commitment for another loan to keep its doors open as the critical holiday season begins.

Great American Capital Partners, a specialty finance company, agreed to lend $350 million to the bankrupt retailer, according to a court filing Wednesday. The funding would come at a steep price, charging Libor plus 11.5 percent and a 3 percent closing fee.

Sears needs the cash to stay afloat during its most important selling period and buy time to develop a long-term survival plan. The company filed for court protection from creditors last month with only $300 million to get it through the bankruptcy process, and initially said it needed a second round of so-called debtor-in-possession financing to stay in business.

"The holiday season, the weeks coming up, are really critical for the company and its ability to reorganize," Sears lawyer Ray Schrock said in a bankruptcy court hearing Thursday.

Chairman Edward Lampert is working on a bid for some of the company's best-performing stores, which could involve swapping his debt holdings for the outlets. Lampert, through his hedge fund ESL Investments, owns the majority of Sears's debt in addition to being the biggest shareholder of the Hoffman Estates, Illinois-based retailer.

Great American, owned by the B. Riley Financial Inc. investment bank, provides financing and often serves as a liquidator when a retailer collapses. It was among the firms that helped dismantle Bon-Ton Stores and Gordmans Stores.