Ways to raise liquidity from your shares, compared.
A concentrated listed position can be turned into cash in more than one way — and the routes are not interchangeable. This is a plain, side-by-side comparison of the four that a substantial holder actually weighs: a securities-backed loan, an outright sale, a brokerage margin loan, and a collar hedge.
The decision is structural, not just about the rate.
Most holders of a large single-stock position start with a false binary: hold the shares, or sell them. In practice there are four common routes to liquidity, and each preserves — or surrenders — a different combination of ownership, control, upside, downside protection, tax timing, and privacy. The right route depends on what the holder is trying to keep, not on which quote looks cheapest.
The four routes compared here are: an institutional securities-backed loan (also called a Lombard loan or stock loan); an outright sale of the shares; a brokerage margin loan against a portfolio; and a zero-cost collar, a hedge that protects the downside in exchange for capping the upside. A collar is not itself a source of cash, but it is frequently weighed alongside the others, and is often paired with a loan.
Six variables that decide it.
| Securities-Backed Loan | Outright Sale | Brokerage Margin Loan | Zero-Cost Collar | |
|---|---|---|---|---|
| Control retained | Yes. Beneficial ownership, dividends (subject to structuring), and voting rights stay with the holder; the position and its upside are preserved. | No. The shares, the votes, the dividends, and all future upside are surrendered permanently. | Yes. Shares stay in the account; the holder keeps ownership and upside, but the broker holds and can liquidate the collateral. | Yes. The holder keeps the shares and the vote; upside is retained only up to the call strike, downside protected below the put. |
| Recourse profile | Negotiated: non-recourse, limited-recourse, or full-recourse. A non-recourse structure bounds the holder’s downside at a defined floor. | Not applicable — no debt is created. | Full-recourse to the account and, in many structures, to the borrower personally. | Not applicable as debt, but the hedge itself carries counterparty exposure to the option writer. |
| Speed to funds | Typically one to three weeks from indicative terms to funding, because documentation and custody are bespoke. | Fast where the shares are freely tradable; constrained or impossible where they are locked-up, restricted, or in a closed window. | Fastest against an existing brokerage account — often a matter of days. | Days to a couple of weeks, depending on the size of the position and the depth of the options market. |
| Disclosure footprint | A pledge by a substantial shareholder is typically a disclosable event under the relevant beneficial-ownership regime; timing is planned per market. | A disposal by a substantial holder or insider is generally disclosable, and is visible in the market as selling pressure. | Often not separately disclosable where shares sit in a broker nominee and no distinct pledge is registered. | Derivative positions may be disclosable for insiders and substantial holders under some regimes; treatment varies by market. |
| Cost framing | A periodic coupon on the advanced amount; only a fraction of the position’s value is drawn. Priced by structure, recourse, tenor, and the underlying. | Transaction costs plus, potentially, a capital-gains tax charge on the realised gain. No ongoing cost. | Interest at a published rate, often tied to a base rate plus a tiered spread. Standardised, not negotiated. | Can be structured at or near zero net premium (the put is funded by selling the call); the “cost” is the capped upside. |
| Use of proceeds | Unrestricted cash for diversification, a bridge, tax-efficient timing, or downstream deployment, while the position stays intact. | Unrestricted cash, but the holder has exited the position entirely. | Typically flexible, though some facilities restrict use; suited to short-term, revolving leverage. | No cash raised by the collar itself — it protects value; cash is raised by borrowing against the now-hedged position. |
This table is a general comparison of instrument types, not a quote or a representation about any specific transaction, holder, or market. Tax, disclosure, and eligibility outcomes depend on the jurisdiction, the holder’s status, and the structure, and must be assessed with professional advisers. See the disclosures.
Which route fits which holder.
- ·A securities-backed loan fits a holder who wants liquidity but intends to keep the position — for diversification, a bridge, tax-timing, or event-window discretion — and who values a negotiated, optionally non-recourse structure with custody outside the lender. It suits concentrated, substantial, or restricted holdings where a sale is undesirable or constrained.
- ·An outright sale fits a holder who has decided to exit the position and wants the full value in cash, is comfortable crystallising the gain (and any tax on it), and does not need to preserve control or future upside. It is the simplest route when the objective is genuinely to reduce exposure to the stock.
- ·A brokerage margin loan fits a holder with a diversified account seeking modest, short-term, revolving leverage, who is comfortable with full recourse, standardised terms, collateral held at the broker, and rapid, discretionary margin calls. It is efficient for tactical leverage; less suited to a long-tenor need against a single concentrated line.
- ·A zero-cost collar fits a holder whose first objective is protecting the value of a concentrated position rather than raising cash — and who will accept a cap on the upside to fund that protection. A collar is frequently combined with a loan: hedging the position can support a higher loan-to-value, because the lender’s collateral is protected against a fall.
These routes are not mutually exclusive. A holder may hedge a position with a collar and then borrow against the hedged line; another may sell part of a position and finance the rest. The purpose of the comparison is to make the trade-offs explicit, so the structure follows the objective rather than the other way round. For the detailed structural contrast between the two lending routes, see Stock Loan vs Margin Loan.
Go deeper.
Stock Loan vs Margin Loan
The seven structural differences between an institutional stock loan and a brokerage margin loan, and which fits which holder.
Read →Recourse Profiles Explained
How non-recourse, limited-recourse, and full-recourse structures allocate the downside — the variable that most changes the outcome.
Read →Concentrated Single-Stock Liquidity
The use case where the choice between selling, borrowing, and hedging matters most.
Read →On choosing between the routes.
Q · 01 What is the difference between a securities-backed loan and selling the shares?
Q · 02 Is a securities-backed loan just a margin loan by another name?
Q · 03 Which option is cheapest?
Q · 04 Does raising liquidity against my shares have to be publicly disclosed?
Q · 05 Can I keep the upside on my shares while still raising cash?
Weighing the routes for a specific position?
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