Borrow against your concentrated stocks. 
No margin calls.

A Collar Advance is a way to borrow against your stock for those with a long term time horizon, while keeping some of the economic exposure to it—without the risk of margin calls.

It combines two components:

1. A “collar” on your stock
   
   This defines the range of outcomes you care about over the next 1-5 years:
   
   • A floor that limits how much you can lose if the stock declines.
   • A cap that defines how much upside you participate in if the stock rises.
2. An advance of cash
   
   You receive immediate liquidity based on the value of that position.
   

You continue to own your shares throughout the term.

The collar provides hedging for the bank, allowing them to lend against it at typically a lower cost, and a fixed duration normally has a lower risk than a standard margin loan.

Collar Advances are also known as:

• Variable Prepaid Forward Contracts (VPFC)
• Prepaid Variable Forward Contracts (PVFC)

These structures have been used for decades—mainly by ultra-high-net-worth clients and founders with large concentrated positions—to access liquidity without selling and without exposing themselves to margin-call risk.

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Collar Advance is designed for people who:

• Hold at least $2M+ in a single stock,
• Want liquidity without selling,
• Are sensitive to taxes, and
• Prefer to avoid the forced-selling risk of margin loans.
• Do not need short-term access to liquidity (Collar Advances cannot be exited early)

It is most commonly used by:

• Senior employees at public companies with large vested positions,
• Founders and early employees with concentrated equity,
• High-net-worth investors and small family offices holding single-stock exposure.

Typical advance rates range from 70% to 90% of the current stock value, minus the interest and transaction expenses.

Your exact borrowing power depends on:

• Volatility of the stock
• Liquidity of the options market
• The specific floor and cap you select
• Overall market conditions on the day of execution

Example:

On a $1.35M position, clients have accessed north of $1M in liquidity — a level of financing that is not available through traditional margin lending or traditional banks.

A Collar Advance is structured so it isn’t subject to margin calls.

Traditional margin loans force you to add cash or sell shares if your stock drops below a maintenance threshold. This is precisely the risk that can create financial disasters for people using margin to fund real-estate or long-term investments.

A Collar Advance avoids this because:

• The floor (put option) is designed to protect the value below an agreed level.
• The bank underwrites the collared package.
• There is no daily mark-to-market exposure that can trigger forced liquidations.

Your downside is defined at the start of the contract, subject to the issuing bank’s credit risk.

Costs are expressed as a single fixed all-in rate for the entire term.

In recent examples, this has been in the 4.7%–5.4% implied annualized interest rate based on SOFR swap rates as of October 9, 2026.

That rate already includes:

• The embedded pricing of the put and call
• Custody and administration fees
• Structuring and execution costs

Compared to alternatives:

• Margin borrowing: Often secure overnight finance rate (SOFR) is + 2.5–4% at major brokerages. Rates float, so your cost can decrease with favorable rates but can also increase unexpectedly.
• Mortgages: Recent jumbo mortgage rates have been ~6–7%, often significantly higher.
• Selling stock: The “cost” is the immediate tax bill, which can remove 20-30%+ of the proceeds upfront.

The Collar Advance rate is fixed for the term and can compare favourably with alternatives.

Most Collar Advances run for approximately 2-5 years. Longer or shorter terms may be available depending on the stock and conditions.

At maturity:

1. The stock’s final value is compared to the floor and cap.
2. You receive the economic value of the position:
   
   • If the stock ends below the floor, the protection absorbs the loss beyond that point.
   • If it ends between the floor and the cap, you participate in the stock’s performance within that band.
   • If it ends above the cap, you receive value up to the cap.
3. Settlement can occur:
   
   • In shares, or
   • In cash, depending on the structure and your preference
4. You may be able to enter a new Collar Advance if you want to maintain the strategy.

Collar Advances are subject to underwriting at the time of issue, so there is no guarantee that you will be able to enter a new Collar Advance and roll forward a contract and that rates would remain competitive additionally it is important to work closely with your tax advisor regarding tax treatment of your specific transaction.

Proceeds can be used for virtually any purpose, including:

• Creating a diversified investment portfolio (e.g. direct indexing or long/short)
• Financing a down payment
• Funding a business or startup investment
• Paying taxes, education costs, or major expenses
• Purchasing property for family members

Investors may choose to finance real-estate purchases via a Collar Advance because:

• Rates are typically lower than mortgage rates,
• There is no margin-call risk

*Collar Advances are fixed duration advances typically issued for a 1-5 year duration and have to be paid off after that period of time so please consider your ability to repay prior to entering into the transaction.

Selling triggers an immediate capital gains tax, which can consume a substantial portion of your proceeds — often 20% to 37% depending on your state and income bracket.

By contrast, a Collar Advance lets you:

• Access liquidity without triggering a taxable sale
• Maintain economic exposure to the stock within the collar’s defined range
• Defer taxes until the end of the term (or later, if you continue to roll the strategy)
• Capture potential upside up to the cap

For investors with appreciated stock and a long-term view, this economic profile may be preferable to selling.

Margin loans are simpler but are structurally risky:

• If the stock drops, you may be forced to add more collateral immediately.
• If you cannot, the broker sells your shares at the worst time.
• Rates are higher and floating; you take interest-rate risk.
• Loan To Value (or the percentage of securities that will be lent) is usually limited to 50%, depending on the stock.

A Collar Advance offers:

• No margin calls
• Fixed rates for the entire term
• Higher borrowing power (typically 70–85%+ of the value of your securities)
• Defined downside protection*
• Tax deferral

*Downside protection is provided by the Collar product itself, which, while unlikely, is subject to issuer credit risk of the bank issuing the product.

The full process typically takes 3–4 weeks.

The timeline includes:

1. Indicative term sheet (1–3 days)
2. Review with Financial Partners for your situations
3. Documentation and counterparty approval (1–2 weeks)
4. Execution and settlement (5–7 days)
5. Funding occurs promptly after execution

The majority of time is driven by bank underwriting and legal documentation.*

Eligible stocks typically include:

• Large-cap, U.S.-listed equities
• Stocks with deep, liquid options markets
• Many of the same stocks accepted in Exchange Funds

We work with our partners to evaluate eligibility based on:

• Market capitalization
• Daily trading volume
• Options liquidity
• Volatility profile
• Position size

A Collar Advance is structured as a financing arrangement and an open transaction, not a sale.

That means:

• You continue to own the shares,
• You retain economic exposure (within the floor and cap),
• And capital gains tax is typically deferred until the end of the term.

Two important tax notes:

• Interest expense is generally not deductible due to IRS “straddle rules” (IRC Section 1092). Instead, you add the interest to your stock’s cost basis, which can reduce future gains.
• Settlement mechanics (cash vs. shares) can affect tax timing, so investors should consult a tax advisor for personalized guidance.

The broad principle:

You get liquidity today without triggering immediate capital gains tax.

Note Collar Advances are complicated products, and you should work closely with your tax advisor if you have questions for your specific situation.