WEST HARTFORD, Conn. (AP) — Colt Defense has announced an agreement with its secured lenders for $20 million in credit to allow ordinary business operations to continue during its chapter 11 bankruptcy proceedings.

Colt said the financing will give it liquidity to meet all its obligations to customers, vendors, suppliers and employees during its court-supervised restructuring.

Colt's chief restructuring officer Keith Maib said the new financing “is an important step forward.”

The 179-year-old gun manufacturer filed for chapter 11 bankruptcy June 14. It estimates it owes up to $500 million to dozens of creditors.

Analysts have said Colt's problems followed the loss of a major government contract for the M4 carbine rifle in 2013, and a recent fall in sales of sporting rifles and handguns to the general public after a spike in sales a few years ago.