Borrowing against restricted or unvested stock.

Borrowing against restricted or unvested stock is possible but limited. Lenders generally require freely transferable, listed shares as collateral, so RSUs, lock-ups and private pre-IPO holdings often don’t qualify for a standard Lombard loan. Once shares vest and become marketable — or via specialist pre-IPO structures — borrowing becomes feasible.

The short answer

A conventional Lombard loan is secured by a pledge of liquid, listed, freely transferable securities. Restricted, unvested and private pre-IPO holdings usually fail one or more of those tests, so they do not qualify for a standard facility while the restriction is in place. That is the general rule. It is not the whole story: the restriction is often a matter of timing rather than a permanent bar, and there are specialist routes for holders who need liquidity before it lifts. A founder or executive with wealth locked in restricted or pre-IPO stock has two realistic paths — wait for the shares to become marketable, or use a structure built for exactly that situation.

Why restricted and unvested stock is hard to pledge

The heart of a Lombard loan is that the lender can value the collateral day by day and, in the last resort, sell it to clear the debt. Restricted and unvested stock breaks both halves of that. Unvested awards are not yet shares at all: an unvested restricted stock unit (RSU) or option is a contractual right to receive shares in the future, subject to service or performance conditions. There is nothing to pledge and nothing to sell, so there is no collateral in the sense a lender means.

Vested-but-restricted shares do exist — post-IPO lock-up shares, founder holdings subject to contractual restrictions, or restricted securities that carry a holding period and resale limits — but they cannot be freely transferred. A lender that cannot rely on being able to realise the collateral on demand cannot treat it as ordinary security. Private pre-IPO shares add a further problem again: there is no public market and no observable price, and a transfer often needs the company’s or other shareholders’ consent. Each of these features makes the holding difficult, and sometimes impossible, to treat as standard Lombard collateral.

What lenders accept

Good Lombard collateral is freely transferable, listed on a recognised exchange, liquid, and readily valued. Against that benchmark, the holdings that typically fail are clear: unvested RSUs and options, because they are not yet shares; lock-up shares during the lock-up window; restricted securities that require a holding period or limit resale; and private-company shares with transfer restrictions. What can sometimes work, with structuring, is a holding where a clear and near-dated path to free trading exists — a lock-up close to expiry, restricted shares with a defined route to registration or clearance, or a sizeable pre-IPO position in a company with a credible, dated path to listing. These are financed through bespoke arrangements at conservative advance rates, not as an off-the-shelf loan.

Concentration matters too. Even once the shares are free to trade, a single founder or executive stake is assessed as a concentrated position, not a diversified book. A large single holding in one name supports a more cautious loan-to-value than a broad, liquid portfolio, because the lender must be able to value and, if necessary, realise it without moving the market against itself.

Options for founders before liquidity

Founders and early employees are often asset-rich and cash-poor in the run-up to an exit: the paper value is real, but it is not yet spendable. There are three broad routes to liquidity before the restriction lifts. The first is simply to wait, and to pledge the shares once they vest and become marketable. The second is a pre-IPO bridge — a structure arranged against an anticipated liquidity event, sized conservatively and documented for the specific company, its cap table, and its expected timeline. The third is to borrow against other, already-marketable assets in the meantime: a diversified portfolio, or listed holdings from a prior liquidity event, can raise cash while the restricted stake stays untouched.

It is worth being plain about what a pre-IPO structure is and is not. It is bespoke, more conservative on advance rate than a loan against listed shares, and priced for the additional risk the lender carries in financing an asset that is not yet freely tradable. It is not a standard Lombard loan, and it is not available against every private holding — the company, the stage, and the visibility of the path to listing all matter.

Once shares vest

When shares vest, settle into the holder’s name, and are free of transfer restrictions — after a lock-up expires, a holding period runs its course, or restricted stock is registered or cleared — they become ordinary listed collateral. At that point a standard Lombard loan is straightforward. The shares are assessed on liquidity, market, volatility, concentration and recourse, exactly like any other listed holding, and the loan-to-value follows from that assessment. For many holders the whole question is one of timing: the same stock that could not be pledged one quarter is ordinary collateral the next, once the restriction has lifted. Planning the facility ahead of the vesting or expiry date means the liquidity is ready when the shares are.

Risks and regulatory notes

Transferability is not the only constraint. Restricted and insider stock sits inside a web of contractual and regulatory rules. Insiders and affiliates may be subject to blackout periods, pre-clearance requirements, and obligations to disclose a pledge of their shares. Some issuers’ own policies, and some governance codes, restrict or prohibit directors and officers from pledging company stock at all. Securities law may limit the resale of restricted securities for a defined period. And any pledge of a substantial or insider stake can itself trigger disclosure obligations to the market or the regulator.

None of this is legal advice. The point is that borrowing against restricted or insider stock is as much a legal and compliance question as a credit one, and both sides must be cleared before a facility is arranged. Where the shares are, or are about to become, marketable, a disciplined structure can turn a locked position into working capital without a sale — the same principle that sits behind every Lombard loan. Where they are not, the honest answer is to wait, or to look to a specialist pre-IPO route. A senior principal can tell you quickly which of those applies to a specific holding.