Forge Options Exercise Bridge Loan

A new way to exercise your options

Employees seeking to exercise their options and sell the resulting shares may be eligible for a loan through Forge.

How does a Forge Options Exercise Bridge Loan work?

If you are interested in selling shares of private stock, need to exercise your vested options first, and could use financing assistance to do so, then this loan may be worth learning more about. First, connect with a Forge Market Specialist by signing up for the Forge platform. You can discuss your goals and work with them to find a buyer for the shares that will result from your options exercise. When you’re ready to explore a loan:

Learn & Apply

If you’d like to apply for a Forge Options Exercise Bridge Loan to finance your exercise, or want to learn more about the product, ask your Market Specialist or connect with the Forge Lending team.

Approval & Funding

After a buyer for your shares has been identified, submit your loan application. If approved, the loan will pay for your options exercise after applicable pre-funding conditions are met.

Sell Your Shares

Once your options exercise is complete, continue working with your Market Specialist to complete your sale on the Forge Markets platform.

Repay Your Loan

Your loan is repaid (including principal, fees/expenses, and any interest) from your sale proceeds and your loan is closed.

With your loan closed, and after settling your other obligations, you walk away with your remaining sale proceeds while not needing to provide cash up-front or put your other personal assets at risk.

FAQs

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What is the Forge Options Exercise Bridge Loan?

It can be difficult to come up with the funds needed to exercise your vested, private company stock options, and Forge believes that option holders should have the ability to acquire and sell the equity they have earned.

Forge Lending LLC ("Forge") offers employees an Options Exercise Bridge Loan that can provide you with the funds needed to exercise options and sell the resulting stock without incurring a significant upfront cash expense.

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Who is eligible for a Forge Options Exercise Bridge Loan?

A loan from Forge is intended to be a short-term loan for individuals who need outside funding to exercise their options before selling the resulting stock. In order to receive a loan from Forge, you must have a buyer for your stock on the Forge Securities LLC ("Forge Markets") platform and approval from the company to pledge and sell your vested stock.

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What can I use the Forge Options Exercise Bridge Loan for?

A Forge Options Exercise Bridge Loan is intended for the exercise of your options with the resulting stock to be sold on the Forge Markets platform.

A loan from Forge is not intended for individuals seeking to exercise options and hold the resulting stock on a long-term basis.

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How is a loan from Forge different from other stock option financing that I've seen?

Forge offers option holders a short-term loan with a flat fee so that you can exercise your vested options and sell your stock. Upon selling your stock, you repay the loan, including any fees and interest, pay Forge Markets commissions, and keep the remaining sale proceeds.

In contrast, many other stock option financing services provide money for options exercise in exchange for a significant percentage of your equity upon sale, sometimes upwards of 40% of your stock.

Forge believes that option holders should have the ability to acquire and sell the equity they have earned and therefore does not claim any of your stock upon successful sale on the Forge Markets platform. See discussion of collateral and the pledge of your stock, below, for further detail about Forge’s rights with respect to your collateralized stock.

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How do I apply for a Forge Options Exercise Bridge Loan?

A Forge Options Exercise Bridge Loan is intended for individuals seeking to exercise options and then sell the resulting stock on the Forge platform.

After you have worked with a Forge Private Market Specialist to seek a buyer for your stock, you may be eligible to apply for a Forge Options Exercise Bridge Loan.

To apply for a Forge Options Exercise Bridge Loan, simply fill out the application that is sent to you via DocuSign by a member of the Forge Lending team. This application is pre-populated with some of your personal information that you previously provided to your Private Market Specialist.

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What additional documentation will you need from me?

Generally, because individuals have been working with a Forge Private Market Specialist seeking to sell their stock, no additional documentation is required by Forge beyond the application, which contains a small number of loan-specific questions.

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Does Forge Lending do a credit check? Will applying for a Forge Options Exercise Bridge Loan affect my credit?

No, Forge does not check your personal credit, and applying for a Forge Options Exercise Bridge Loan will not affect your credit.

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How does Forge Lending decide whether or not to give me a loan to exercise my options?

Forge Markets is an industry-leader in helping employees sell their stock on the private market.

As part of the loan process, Forge evaluates the size of your loan, the loan-to-value ratio, and – within details provided by Forge Markets – the likelihood your transaction will close based on details about the company and the buyer.

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How long does it for my loan application to be approved or denied?

Overall, you can expect the application and loan decision to take approximately one week on average.

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Do I need sign-off from my company?

As part of the lending process, Forge works with your company to ensure you can pledge and sell your vested stock. Your company will need to sign a short form indicating their agreement.

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After approval, how are funds issued to exercise my options?

Forge sends the funds directly to your company on your behalf to exercise your options. After receiving the funds, you work with your company to complete the options exercise, and you can sell the resulting stock on the Forge Markets platform.

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Do I have the ability to cancel my loan request?

Applicants can withdraw from the process up until the point at which funds have been transferred to the company for the purposes of exercising your options.

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What are the fees?

Forge charges borrowers a flat origination fee, which varies based on the amount of the loan and the state in which you reside.

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Does Forge charge interest on my loan?

Forge only charges interest if that loan is outstanding over 120 days. The interest rate varies based on the amount of the loan and the state in which you reside. A typical Forge Markets trade takes 50 days from the time you are matched with a buyer. Forge Markets keeps you apprised of the timelines and next steps along the way.

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Does Forge take a portion of my stock as a fee?

No. Unlike some companies that offer stock option financing, Forge does not claim a portion of your stock as a fee once the transaction is complete. This provides you with full transparency into your borrowing costs so that you can maximize your proceeds from the stock sale. See discussion of collateral and the pledge of your stock, below, for further detail about Forge’s rights with respect to your collateralized stock.

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Are there any tax implications?

Please consult with your tax advisor for more details on any tax implications resulting from either the loan, the options exercise, or the resulting sale of your stock. Forge does not provide tax advice.

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Do I need to put up collateral for the loan? Is the loan secured by anything on my side?

By utilizing a Forge Options Exercise Bridge Loan, you are pledging the stock that results from your options exercise to Forge as collateral. This means that if the sale of your stock does not occur and you do not otherwise repay the loan, Forge can claim up to all stock that resulted from your options exercise. But under normal circumstances, upon you selling your stock, you repay the loan, including any fees, interest and expenses, pay Forge Markets commissions, and keep the remaining sale proceeds.

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What happens if I am unable to sell my stock, or the sale of my shares falls through? Am I still responsible for repaying the loan?

If you are unable to sell your stock or the sale of your stock falls through, and you do not otherwise repay the loan, Forge can claim up to all stock that resulted from your options exercise. None of your other assets are at risk absent fraud or misrepresentation by you to Forge or an event of default on the loan. If the sale falls through, your Private Market Specialist will work with you to find another buyer.

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What happens if my company or another rights-holder exercises a right of first refusal or other similar rights when I try to sell my stock?

If your company or other rights-holder exercises its right of first refusal or other similar rights, the process works the same as if you had sold your stock to an external buyer. Upon the sale of your stock, you repay the loan, including any fees and interest, pay Forge Markets commissions, and keep the remaining sale proceeds.

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Where can I go if I have additional questions?

For questions related to your Forge Options Exercise Bridge Loan, please email [email protected].

For questions related to the sale of your stock, contact your Forge Private Market Specialist.

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What is Forge Lending LLC?

Forge Lending LLC is an affiliate of Forge Global, Inc. and is the entity that issues loans and is regulated by the California Department of Financial Protection and Innovation.

This summary is informational only and does not discuss every term, condition, consideration and risk applicable to a loan obtained through Forge Lending or a securities transaction facilitated by Forge Securities - each is subject to additional legal documentation and disclosures | Forge undertakes no obligation to update this content | No business, investment, tax or legal advice provided | Potential customers should conduct their own due diligence and consult with tax, legal, and financial advisors with respect to any investment or loan | Investments in private securities are speculative, illiquid, and involve a high degree of risk, and may result in partial or entire loss of investment | There is no guarantee that a private company conducts an initial public offering or provides an exit strategy for invested capital | Private securities transactions are subject to the terms of company equity agreements and there is no guarantee that a company will permit a transfer nor that any potential transaction may come to fruition | Forge Lending LLC (loan origination) and Forge Securities LLC (facilitation of securities transactions) provide distinct services and prospective customers enter separate contractual relationships with each entity. Neither entity acts as an agent of the other in connection with the other’s services and each entity has sole discretion as to whether to provide its services to a particular client based on such entity’s own specific requirements which may vary by applicant | Each loan is collateralized, once any applicable pledge restrictions cease to apply, by shares of private stock issued to the borrower upon the options exercise – failure to repay a loan and any applicable interest or fees could result in loss of collateral | The cost of financing includes an initial loan fee and, in some circumstances, may include interest | Loans are made or arranged pursuant to Forge Lending’s California Financing Law License #6054618 | Nothing contained herein is an advertisement or solicitation to sell loan products or services in states or territories where Forge Lending is not permitted to provide such products or services | Consult with Forge to determine if Forge Lending is available in your state | Private securities transactions are facilitated by Forge Securities LLC | Member FINRA/SIPC | View our Customer Relationship Summary here.