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.

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.

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.

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.

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.

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.

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

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.

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

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.