Can you borrow against private company shares?

Generally no — you cannot borrow against private, unlisted company shares through a standard Lombard loan. Unlisted equity is illiquid, hard to value, and has no public market on which a lender could realise it, so most Lombard lenders require listed collateral. Narrow, bespoke exceptions exist, but the practical routes are usually alternatives or waiting for a listing.

The short answer

The short answer is that a standard Lombard loan is, in the ordinary course, not available against shares in a private, unlisted company. A Lombard loan is a pledge of liquid, listed collateral: the lender advances cash against a fraction of a portfolio’s market value, marks that value against a public price, and relies on being able to sell the collateral quickly if the borrowing is not repaid. Shares that do not trade on an exchange break that model at every step, and most Lombard lenders will therefore decline them.

That is a genuine limitation rather than a matter of appetite. The requirement for listed, liquid collateral is what makes the instrument work and what keeps its terms as competitive as they are; the wider question of eligibility is taken up in the note on how much you can borrow against shares. This note explains why unlisted stock sits outside that envelope, and what a founder can reasonably do instead.

Why private stock is hard collateral

Three features of unlisted equity make it difficult security. First, there is no public price. A lender values a Lombard portfolio daily against exchange quotes; a private company has no continuous market price, only periodic funding-round or fair-value marks that can be stale, negotiated, or absent altogether. Without a reliable, current value, the loan-to-value that anchors the whole facility cannot be struck with confidence.

Second, the shares are illiquid. Even a valuable private holding can take months to sell, if it can be sold at all, and often only to a restricted set of buyers at a price set by negotiation. A lender that may one day need to realise the collateral cannot assume a timely, orderly sale. Third, private shares usually carry transfer restrictions — pre-emption rights, board or investor consent, rights of first refusal, and shareholder-agreement limits — that can block a pledge or a sale outright, or subject it to third-party approval the lender cannot control. Taken together, these features mean a lender can neither value the collateral reliably nor be confident of realising it, which is why a standard Lombard loan is generally off the table.

The narrow exceptions

There are exceptions, and honesty requires acknowledging them without overstating them. A small number of specialist private-credit and pre-IPO lenders will, in the right circumstances, consider bespoke facilities against unlisted stakes — typically in well-known, late-stage companies where an active secondary market or a scheduled liquidity event gives some path to value. Such arrangements are structured individually, are far more conditional and conservative than a standard Lombard loan, and are correspondingly rarer.

These are not products with a rate card, and they are not what most people mean when they ask about borrowing against shares. Whether any such structure is available at all depends on the company, the stake, the documentation, and the lender’s own assessment, and nothing on this page should be read as an offer of financing against private shares or as a statement of terms. Lombard Financing arranges facilities against listed, liquid collateral; where a founder’s need falls outside that, the candid course is to say so and to point to the alternatives below.

What founders usually do instead

In practice, most founders who hold illiquid private stock reach liquidity by another route. The most common is patience with a plan: wait until the company lists, then use a Lombard loan against the now-listed shares in the ordinary way. Where a founder already holds listed but restricted or unvested stock — a different and far more workable case — the note on borrowing against restricted or unvested stock sets out what is possible.

Before a listing, the realistic options are equity rather than credit. A secondary sale of part of the holding to an incoming investor or a secondary fund raises cash directly, at the cost of parting with some shares. Many later-stage companies also run periodic liquidity or tender programmes that let founders and employees sell a portion of their vested equity on defined terms. And where a listing is genuinely on the horizon, the structuring question is really one of timing and bridging — discussed in the notes on the pre-IPO bridge and the founder Lombard loan — rather than of lending against the private stock itself.

After an IPO

Everything changes once the shares are listed. A public listing gives the stock a daily market price, a route to sale, and the liquidity a lender needs, and once any lock-up or restriction has lifted the holding becomes ordinary Lombard collateral. At that point a founder can pledge the listed shares and draw against them under a Lombard loan in the usual way, keeping ownership and upside while raising cash — the very thing that was not possible while the company remained private. The practical takeaway is that borrowing against a founder’s equity is often a question of when, not whether: the instrument becomes available the moment the collateral becomes listed and liquid.