Key Facts:
- Client: Cypriot UBO
- Loan Amount: c. $15 Million
- Loan to Value: 50% LTV
- Share Type: Pre-IPO, US Listing, Pre-money valuation $1.2 billion
- Interest Rate: 7% IR / 5% Equity Fee
Pre-IPO loans are a very niche area of the securities backed lending market. In theory, anyone with significant equity in a private company that has announced its intention to list can explore taking out a pre-IPO loan. While equity in such companies can become highly valuable after the IPO, future liquidity and growing valuations are of little help if you need access to capital before the business goes public. It’s for this reason that pre-IPO loans are becoming more common.
A recent case involved arranging a pre-IPO loan for a Cypriot UBO. The client was looking for a $15 million loan and wanted to use his AI Digital Tech Company shares as collateral.
Generally, to benefit from this specialist type of financing, lenders will consider lending against stocks in very solid, high growth companies with in-demand products or services. With the pre-money valuation of the company being $1.2 billion and the shares listed in the US, we were able to find a suitable lender and product tailored to the client's broader ambitions.
Pre-IPO loans are complex, and it’s nearly impossible to navigate the market successfully alone. Lenders are few and far between, and you are unlikely to know all the players in the space, let alone be able to contact decision-makers directly.
Contact Enness to learn more to have an informal and no-obligation chat about pre-IPO loans and if it could be a good solution for you. Read more about lombard finance.
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