Unlisted Stock Loans

Unlisted stocks refer to shares of a company that are not traded on a public stock exchange like the London Stock Exchange or NASDAQ. Unlisted stocks are often associated with smaller companies, startups, or private businesses that choose not to list publicly, either due to regulatory requirements, cost, or strategic reasons.

For individuals or businesses holding unlisted stocks, securing financing can be challenging as mainstream lenders often view them as higher-risk assets. However, niche lenders specialising in unlisted stock loans can provide solutions to unlock the value of these assets.

Because unlisted stock loans use securities in private companies as collateral, the legal aspects of the transaction will need to be considered carefully. Potential restrictions surrounding the sale or transfer of stocks will need to be examined, for example. Other limitations and consequences of using your unlisted equity as collateral for a stock loan will also need to be identified and appropriate workarounds thought out. Seeking expert legal advice and working with partners like Enness, who have a track record with this kind of transaction, will be critical to success and peace of mind.

If you are a sole shareholder with more control over your equity or company, the process may go quicker than if you need to liaise with other shareholders or partners.

Yes, provided the startup is profitable or shows significant potential. Lenders will look closely at the company’s track record, revenue growth, investor base and industry outlook. Early-stage startups without revenue are unlikely to qualify, but later-stage businesses with proven performance and investor backing can.

LTVs for unlisted stock loans are typically lower than for listed securities often in the 20–40% range. However, with strong company performance, diversified assets and a proven shareholder track record, lenders may consider higher ratios.

Borrowing against private company shares is a niche but growing part of the securities-backed lending market. Shareholders use their equity as collateral to raise significant credit lines without selling stock or diluting ownership, especially where the business is profitable and has no immediate plans to list.

Typical scenarios: reinvesting into the company, acquiring assets (e.g. property), diversifying concentrated wealth or unlocking liquidity pre-IPO. Pre-IPO financing can also be considered in the right circumstances.

In some cases, restricted stock (including RSUs) can be considered as collateral. Eligibility depends on vesting schedules, transfer restrictions and the issuing company’s performance. While not all lenders accept restricted stock, specialist providers may structure facilities where the company is well-capitalised and the equity terms allow it.

Both products unlock liquidity from your equity, but lenders assess risk differently depending on whether the shares are private or publicly traded.

Related solutions: Lombard Loans and Single Stock Loans.

Confidentiality is typically a key feature of unlisted stock lending, particularly for founders, executives, and early investors who want to access liquidity without signalling a disposal of shares to the market or other shareholders.

Unlike selling equity, borrowing against private company stock allows you to retain ownership while raising capital discreetly. Lenders experienced in this area are accustomed to working alongside legal advisers, trustees, and corporate structures to ensure the transaction is handled appropriately and with minimal disruption to governance arrangements or shareholder agreements.

However, the level of disclosure required will depend on the company’s constitutional documents, shareholder approvals (if applicable), and the jurisdiction in which the shares are held. A specialist broker can help structure the facility so it aligns with both lender requirements and the company’s internal rules.