Exercise windows rarely align with an IPO or secondary. Bridge facilities against unlisted or locked stock exist, but lender appetite turns on the cap table, last round pricing and the credibility of the exit.
Option exercise windows are set by a plan document, not by market conditions. An executive leaving a company, or holding options that lapse on a fixed date, often has to fund both the strike price and the perquisite tax long before any sale is possible.
Lenders will finance this, but they underwrite the company more than the borrower. What moves a credit committee: the last priced round and who led it, the cap table's cleanliness, whether the plan permits transfer or pledge of exercised shares, and any observable secondary market in the stock.
Structure matters as much as approval. The cleanest facilities are bullet loans with interest serviced monthly and principal repaid from the eventual sale, with an escrow or power-of-attorney arrangement over the sale proceeds. Where the plan blocks pledging, lenders sometimes rely on a personal covenant supported by other collateral instead — priced accordingly.
The sequencing problem is the real work: exercise date, tax payment date, lock-in expiry and expected liquidity window rarely line up. Modelling the cash calendar first — then shaping tenor and repayment around it — is what turns a theoretically fundable request into a funded one.
Where the exit is genuinely uncertain, borrowing to exercise concentrates risk rather than releasing it. That conclusion is sometimes the right advice, and we give it.
If this describes a decision you are weighing, the desk will structure it with you in confidence — see the financing guides or the mandates we arrange.
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