What determines “how much”?
Lenders estimate a collateral value (often with haircuts to last close or a conservative mark). They apply an advance rate cap per name or bucket (single stock vs diversified ETF). They may impose portfolio-level limits, currency constraints, or minimum liquidity thresholds. Concentrated positions in one volatile issuer almost always borrow less, percentage-wise, than a broad index fund.
Your personal balance sheet may still matter in some programs—even collateral-heavy deals often require KYC/AML and sometimes personal guarantees depending on structure (read your term sheet).
How it works
You provide statements and position-level detail. The desk runs eligibility and advance grids. You receive an indicative range before legal spend. After diligence, a firm advance appears in closing documents. Post-close, marks move with markets—your effective headroom moves too if covenants tie to LTV. For methodology context, read how lenders value collateral and LTV ratios.
Key benefits
- Transparent sizing — numbers tie to stated assumptions, not guesswork.
- Potential to preserve upside on retained exposure versus selling shares to raise the same cash.
- Comparable sizing — use rates & terms to understand advance rates and pricing.
Risks or considerations
Higher advance rates increase lender risk and may tighten covenants. A market drop can push you through a trigger quickly. Do not size lifestyle or business obligations to “best case” marks. Educational only—not a commitment to lend.
When this strategy makes sense
- Single-stock concentration after IPO lock-up or RSU vesting—often lower advance, higher scrutiny.
- Diversified public portfolio — may support more generous advance within policy caps.
- Cross-border holdings — custody and tax reporting can affect timing and eligibility.