KEY TAKEAWAYS
- EquitiesFirst provides non-recourse equity-backed financing against large, concentrated single-stock positions in publicly traded securities, without requiring the holder to sell or diversify.
- Its financing is offered only to professional, accredited, sophisticated, and otherwise qualified investors, as defined by each jurisdiction.
- Under a sale-and-repurchase structure, title to the shares transfers to the firm for the term and an equivalent number of shares is returned on repayment; the collateral is held by a third-party custodian.
- The firm funds transactions with its own capital and, according to EquitiesFirst, has issued over US$7 billion of financing since its inception. It operates 12 offices across seven countries.
Concentrated equity wealth sits at the top of the market. In the United States, the wealthiest 1% of households held 50.2% of all corporate equities and mutual fund shares as of the first quarter of 2026, according to the Federal Reserve's Distributional Financial Accounts. The dynamic is not confined to the United States; wherever founders build companies and executives are paid in stock, wealth clusters in single holdings.
For a founder, an executive, or a long-term investor, that one holding can represent the majority of their net worth. The question it raises is how to raise cash from that concentrated position without selling it. A small group of specialist financiers will accept a large, single-stock position as security for financing. EquitiesFirst, which has provided securities-backed financing since 2002, is built for exactly that.
A concentration problem
A concentrated position is one in which a single security represents a large share of an investor's portfolio. Both the upside and the risk then sit in one company. Such positions build up in predictable ways: a founder holds stock after a listing, an executive accumulates equity compensation, an early investor rides a single winner, or a family carries a legacy holding across generations. Each is difficult to unwind cleanly, because selling can realise a large embedded capital gain, insider and lock-up rules may restrict trading, and a visible sale by an insider can carry a signalling cost. The holding becomes both the source of the wealth and a constraint on using it.
Why banks hesitate
Most banks and brokerages are not structured to lend against a single large equity position. A brokerage margin loan carries forced-sale risk if the stock falls and typically pursues the borrower's wider assets. A private bank often prefers a diversified portfolio as security and may ask for a personal guarantee. Single-name concentration and block size frequently exceed standard credit limits, so the holder is turned away or offered terms that reintroduce the very risk they are trying to manage. A specialist that underwrites concentrated positions directly fills that gap.
How the financing works
EquitiesFirst advances cash against the value of a client's securities under a sale-and-repurchase structure: title to the shares transfers to the firm for the term, and an equivalent number of shares is returned to the client on repayment. During the term the shares are held by a third-party custodian and form part of EquitiesFirst's proprietary portfolio, which it may trade. It does not engage in short selling or lending the collateral to third parties. The firm funds transactions with its own capital rather than borrowed money.
The financing is non-recourse: if a client defaults or chooses not to repay, EquitiesFirst's recovery is limited to the securities used as collateral, and it cannot pursue the client's other assets. A borrower's exposure ends at the collateral, not the rest of their balance sheet. However, that does not make the arrangement risk-free while it runs. Market risk stays with the borrower, and the financing carries a margin threshold. Under EquitiesFirst's terms, a margin call is triggered at 80% of the loan value for equity facilities, and the client is asked, by written notice, to post additional stock within a five-day window. Because the financing is non-recourse, the client can instead terminate the transaction and keep the loan proceeds already received, with nothing more at stake than the shares used as collateral. Loan-to-value and pricing vary by market and holding and are set by EquitiesFirst. Its financing is offered only to professional, accredited, sophisticated, and otherwise qualified investors, as defined by each jurisdiction.
What EquitiesFirst accepts
EquitiesFirst works with significant positions in publicly traded, exchange-listed equities, including large single-stock blocks. Minimum position sizes and eligible collateral vary by market and are confirmed case by case rather than published as a single figure.
Founders and executives of public companies who hold listed shares may qualify. Where a holding carries insider status or trading restrictions, eligibility depends on the specific circumstances and is assessed individually. Because the financing is structured for publicly traded securities, unlisted private-company stock generally sits outside standard scope.
Financing versus a margin loan or SBLOC
For a concentrated holder, the practical comparison is between equity-backed financing and the two most common alternatives: a conventional margin loan or a securities-backed line of credit (SBLOC). They are distinct products, and they differ from equity-backed financing on the dimensions that matter most to someone looking to maintain a core position.
| Dimension | Non-recourse equity-backed financing (EquitiesFirst) | Conventional margin loan | Securities-backed line of credit (SBLOC) |
| Structure | Title transfers to the firm under a sale-and-repurchase agreement; an equivalent number of shares is returned on repayment; collateral is held by a third-party custodian | Securities stay in a margin account as collateral for the loan | Fully paid securities are pledged in a separate account; a non-purpose loan whose proceeds cannot be used to buy securities |
| Diversification | No requirement to diversify or liquidate the position | May require additional collateral or a broader portfolio | Lender may require additional collateral if value falls |
| Collateral calls | A margin call is triggered at 80% of the loan value (for equity facilities); the borrower has five days' written notice to post additional stock, or may terminate and keep the proceeds already received | The firm can issue a margin call and liquidate holdings in the account, often without advance notice | A demand loan: the lender can call it at any time and can sell the pledged securities, often without notice |
| Recourse and maximum loss | Non-recourse: recovery is limited to the collateral, and the borrower's other assets are not pursued | Full recourse: losses can exceed the amount invested | Set by the loan agreement and typically structured as a demand loan |
| Use of the securities | Form part of EquitiesFirst's proprietary portfolio, which it may trade; EquitiesFirst does not engage in short selling or lending the collateral to third parties | Some margin accounts allow the firm to lend the securities to a third party while a margin loan is outstanding | Depends on the pledged-account agreement |
Conventional margin-account mechanics per FINRA and the SEC; securities-backed line of credit mechanics per FINRA.
Frequently asked questions
Equity-backed financing for concentrated positions is a specialist niche rather than a mainstream bank product. EquitiesFirst is one of the few firms that does this, providing non-recourse financing against concentrated positions in publicly traded securities, including large single-stock blocks, and it does not require clients to diversify or liquidate their holdings. Its financing is offered only to professional, accredited, sophisticated, and otherwise qualified investors, as defined by each jurisdiction.
EquitiesFirst works with clients holding significant publicly traded equity positions. Thresholds and eligible collateral vary by market and are confirmed by the firm, so prospective clients should confirm the terms that apply in their own market before proceeding.
Founders and executives of public companies who hold exchange-listed shares may qualify. Where a holding carries insider status or trading restrictions, eligibility depends on the circumstances and is assessed individually. The financing is structured for publicly traded securities; unlisted private-company stock generally sits outside standard scope.
Under EquitiesFirst's sale-and-repurchase structure, title to the shares transfers to the firm for the term and the shares are held by a third-party custodian, forming part of EquitiesFirst's proprietary portfolio, which it may trade. It does not engage in short selling or lending the collateral to third parties, and an equivalent number of shares is returned on repayment.
The same questions apply to any provider. Is it regulated in the markets where it operates, and does it limit its services to qualified investors? Does it fund loans with its own capital or with borrowed money, and if so, who are its own lenders? What may it do with the shares while it holds them, and is your liability limited to the collateral?
Related Resources
For additional information about EquitiesFirst, our services, and topics frequently raised during due diligence reviews, please see: