Crypto-Backed Loan for UK National Using Illiquid Private Shares

Key Details:

• Client: UK national resident in the US
• Net Worth: Approximately £2 million, largely held in private company shares
• Requirement: Circa £300,000 to invest in a start-up without selling private shares
• Challenge: Private shares subject to transfer and lending restrictions, alongside cross-border considerations
• Solution: Bespoke equity-backed capital structure, subject to lender and legal requirements

The client was a UK national resident in the US with an estimated net worth of approximately £2 million, largely held in illiquid private company shares. The client required approximately £300,000 to invest in a start-up and wanted to explore a financing structure that would provide access to capital without requiring an immediate sale of the existing private shares.

The private shares were subject to strict transfer and lending restrictions, limiting the ability to establish conventional security arrangements. The client’s cross-border circumstances and the nature of the underlying asset further narrowed the pool of lenders able to consider the transaction.

Enness Global identified a specialist lender experienced in structuring bespoke capital solutions involving non-traditional assets. A contractual structure was developed to provide the lender with appropriate visibility over the underlying asset while taking account of the applicable shareholder and transfer restrictions. The final structure remained subject to lender approval, legal review and the specific terms agreed between the relevant parties.

The proposed arrangement provided an alternative route to accessing capital without requiring an immediate disposal of the private shares. This allowed the client to explore funding for the start-up investment while retaining ownership of the underlying equity, subject to the terms and conditions of the facility.

This case demonstrates how specialist lending can provide alternative financing solutions where conventional secured lending may not be appropriate. Private company shares can present particular challenges due to their illiquidity, transfer restrictions and valuation considerations, making specialist structuring and appropriate lender selection important.

Important Information

Enness Global does not provide advice or recommendations on investments or Securities-Backed Lending, and lender introductions are unregulated. Specialist equity-backed lending may fall outside UK FCA regulation depending on the structure and circumstances of the transaction. Clients should seek independent legal, tax and financial advice before entering into any arrangement.

Risk Warning

Private company shares can be illiquid and their value can fall as well as rise. Where borrowing is linked to or secured against investments or other assets, changes in value or liquidity may result in additional collateral requirements, partial repayment or the sale or transfer of pledged assets, subject to the terms of the facility. Failure to meet repayment obligations may result in the loss of secured assets.

Disclaimer

This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. The client scenario has been anonymised and certain details have been generalised to protect confidentiality. Finance is subject to status, underwriting, asset suitability, valuation, jurisdiction and lender criteria. Loan amounts, pricing, lending structures and outcomes are indicative only and may vary depending on individual circumstances. Enness Global acts as a credit broker and not as a lender.