Risk-free loans for my stock options.

You want to exercise your stock options but the cost and taxes are too much.
Non-recourse loans can help.

Exercising your stock options with your own money is risky and, in some cases, prohibitively expensive. When you consider the potential AMT (Alternative Minimum Tax) that comes along with exercising, you may find yourself without enough money.

Instead of using your own capital to exercise your options, there are several firms who will lend you money risk-free (known as a non-recourse loan) to exercise your options. Instead of having you pay back this loan over time like a mortgage or auto-loan, these firms take a cut of your upside when the company goes public. And if your company fails along the way, you owe nothing.

Sounds great, doesn't it? The difficult question is "how do I get a non-recourse loan for my stock options?". That's where we come in.

Vested helps you navigate the world of non-recourse loans. There are plenty investors looking to offer these loans, but it can be difficult to find them.

You don't have to wait for IPO.

Instead of getting a loan and exercising your options, you may be able to sell your shares today to lock in some immediate gains.

Learn More

Who gives me a risk-free loan? Why?

We estimate that there is over $1 billion of capital looking to provide loans to option holders at US backed startups.

Companies are staying private longer and some don't allow secondary sales, so outside investors have to find creative ways in order to invest. By offering you a non-recourse loan, the investor is essentially investing in your company. It's really quite creative (and beneficial to the employee).

Many of these investors offer non-recourse loans, which means you do not have any risk if the company goes out of business. However, with less risk comes a higher cost: you end up giving away more of your upside.

Other loans are structured more like mortgages where you're on the hook for your loan principle and interest, but you keep your entire upside. This type of loan has a much higher risk.

Picking the right loan type can be hard. And finding loan providers can be even more difficult.

There's no downside risk for a reason:

These loans have zero downside risk to you because you are giving up a significant portion of your upside. If the company does well, you owe the principal back, plus ~30% of the profit.

You should consider how you'd feel if your company goes public, and you walk away with a smaller payout.

Here are some non-recourse loan providers:

ESO Fund

Early Stage

Secfi

Early Stage

Quid

Later Stage

Should I get a loan for my options?

That's really up to you. Some folks are in a bind and have 90-days remaining before their stock options expire. Getting a non-recourse (risk-free) loan and giving up a sizeable piece of the upside is a no brainer: getting some upside is better than getting no upside.

On the other hand, getting a mortgage-style loan is more risky. This is similar to exercising with your own money, except you owe interest as well. In some cases, this is beneficial to the employee, as they get to keep their full upside.

Many times there is a short window where there is interest in offering loans for private company stock options. When the opportunity arises, you should be equipped with the tools to make the best decision.

With Vested, we can connect you with the best-in-class loan providers so you can assess all of your options.

Vested helps you get a risk-free loan for your options.

We'll help you find lenders, and give you the tools to feel confident that you're getting the best loan for your shares.

Simply type where you work to get started.

Vested, Inc. ("Vested"), a Securities and Exchange Commission (SEC) registered investment adviser (RIA), offers a software-based financial advice engine that delivers automated financial planning tools to help users achieve better outcomes. Registration as an RIA does not imply a certain level of skill or training and does not constitute an endorsement of the firm by the Commission. A copy of Vested’s current written disclosure brochure filed with the SEC which discusses among other things, Vested’s business practices, services and fees, is available here.

You can view our Client Relationship Summary here.

By using this website, you understand the information being presented is provided for informational and educational purposes only and agree to our Terms of Use and Privacy Policy . Vested, Inc. ("Vested") relies on information from various sources believed to be reliable, including clients and third parties, but cannot guarantee the accuracy and completeness of that information. Under no circumstances should any information or materials presented on this website be used or construed as an offer, recommendation, or solicitation to buy or sell any security, financial instruments, investments or other advisory services or to otherwise participate in any investment strategy or product in any jurisdiction. Additionally, Vested or its affiliates do not provide tax advice and investors are encouraged to consult with their personal tax advisors.

All company data, including but not limited to valuation, projections, and common share price, are estimates derived using public data sets without any endorsement or influence from the company and should be used only for informational and educational purposes. This data should not be used as investment advice.

Company logos are provided by Clearbit. All company names, logos, and brands that appear on this website are property of their respective owners. All company, product and service names and logos used in this website are for identification and informational purposes only. Use of these names, logos, and brands does not imply endorsement.