How to Get a Stock Loan: The Process, Step by Step

A stock loan is arranged in five disciplined stages, and understanding them up front removes most of the uncertainty. First comes a confidential enquiry, in which you outline the holding and the liquidity you require. Second, the lender returns indicative terms — a non-binding structure with sizing and headline economics, typically within one to two business days. Third, those terms are formalised under institutional documentation, with your own counsel reviewing every provision. Fourth, the pledged shares are placed with a qualified, bankruptcy-remote custodian, while you retain beneficial ownership throughout. Fifth, the agreed capital is funded and the facility is stewarded for its life by a single named principal who remains accountable from first contact onward. Each stage gates the next: nothing is documented before terms are agreed, and nothing is funded before the pledge is perfected. The firm’s wider process follows precisely this sequence, regardless of the size or jurisdiction of the position.

Indicative terms are a non-binding term sheet, typically issued within one to two business days of a complete enquiry. They set out the proposed loan-to-value — calibrated to the specific position rather than quoted from a rate card — together with the interest structure, tenor, currency, recourse profile and the principal conditions to be satisfied. The firm quotes indicative ratios only after reviewing the holding; loan-to-value reflects the share’s liquidity, volatility and concentration, and tenors commonly run one to three years. If the indicative structure suits your objectives, the transaction moves to documentation: a facility agreement and a pledge or charge agreement, plus any custodian control agreement the venue requires. You should engage independent counsel to review these, because the documentation governs your obligations and the lender’s remedies for the full term. The choice of recourse — non-recourse, limited-recourse or full-recourse — is settled here, and materially affects your downside exposure should the collateral fall in value.

Speed is largely a function of preparation and complexity rather than any fixed promise. Indicative terms can be returned within one to two business days when the enquiry is complete, and documentation through to funding usually runs to about three weeks — but that assumes a liquid, freely transferable single-stock position, a cooperative custodian and a borrower whose counsel is ready to engage. Several factors lengthen the path: restricted or lock-up shares, insider status requiring regulatory notification, holdings spread across multiple jurisdictions or custodians, corporate borrowers needing structure charts and authorising resolutions, and any disclosure threshold the pledge might cross. None of these is a barrier in itself, but each adds steps. The firm works to indicative rather than guaranteed timelines because the perfecting of a pledge depends partly on third parties — custodians, registrars and, where relevant, regulators. The most reliable way to compress the process is to present complete, accurate information at the outset and to instruct counsel early. Specifics always depend on the holding and jurisdiction.