$15 Million Pre-IPO Loan

• Client: Cypriot UBO
• Loan amount: c. $15M
• LTV: 50%
• Shares: Pre-IPO US-listed AI technology company
• Pre-money valuation: $1.2B

Pre-IPO loans are a specialist form of securities-backed finance that can provide liquidity against shares in a private company ahead of a potential public listing. For shareholders whose wealth is concentrated in a growing business, this can provide access to capital without requiring them to sell their existing equity.

In this case, Enness was approached by a Cypriot ultimate beneficial owner (UBO) seeking approximately $15M of finance against shares in an AI digital technology company. The company was preparing for a US listing and had a pre-money valuation of approximately $1.2B.

The nature of the collateral was central to the transaction. Pre-IPO shares are not as straightforward to finance as publicly traded securities, meaning the lender needs to be comfortable with the underlying company, its valuation, growth prospects and anticipated route to liquidity.

Enness approached specialist lenders operating in the securities-backed lending market and identified a provider prepared to consider the proposed security. The resulting facility provided approximately $15M at 50% LTV, with terms structured at a 7% interest rate alongside a 5% equity fee.

The facility gave the client access to significant liquidity while retaining their exposure to the underlying business. For shareholders approaching a potential IPO, this type of financing can provide an alternative to selling equity before a listing, although the availability and terms of finance will depend heavily on the company, its valuation, the proposed listing and the lender’s appetite.

Pre-IPO lending is a highly specialised area, with a relatively limited number of lenders willing to consider unlisted or pre-listing shares as collateral. The structure also carries additional risks compared with lending against established publicly traded securities, particularly where the anticipated IPO or valuation does not materialise as expected.

Enness works with specialist providers across the pre-IPO lending market, helping clients explore bespoke financing against eligible private-company shares. Each transaction is assessed individually, with lender terms dependent on the underlying company, proposed listing, shareholding and wider borrower circumstances.

Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, investment, legal or tax advice. Enness does not provide advice on Securities-Backed Lending or investments and lender introductions are unregulated. Finance is subject to lender criteria, due diligence and the eligibility and valuation of the underlying securities. Historical terms are not indicative of current or future pricing.

Risk Warning:
Pre-IPO lending carries significant risks. The anticipated IPO may be delayed, cancelled or take place at a valuation below expectations. The value of the underlying shares may fall and lenders may require additional collateral or repayment if agreed lending requirements are no longer met. If the required collateral is not maintained, the lender may enforce its security, potentially resulting in the loss of some or all of the pledged investment.