How does Secfi financing repayment work?

Secfi offers non-recourse financing, which means repayment works differently than a traditional loan. There are no monthly payments, and your personal assets are never at risk. Here's how it works.

When do I repay?

Repayment is triggered by a liquidity event — typically an IPO, acquisition, or direct listing. Until that happens, you don't owe anything. Keep in mind that liquidity events like an IPO often come with a lock-up period (typically 6 months) during which you can't sell your shares. Repayment won't occur until the lock-up period has ended and you're able to access your proceeds. Additionally, some contracts include a 1-year peg, meaning the contract must be active for at least one year before settling. This ensures your shares qualify for long-term capital gains tax treatment before you need to settle, which can significantly reduce your tax burden.

What do I pay back?

At settlement, you repay three components: the original financed amount, an advance fee (a percentage on the amount advanced that accrues over time), and an equity fee (a percentage based on the value of your shares at exit). Your specific terms are outlined in your financing proposal and contract.

What if my company never exits?

If your company doesn't go through a liquidity event, you owe nothing. That's what makes this non-recourse — the financing is backed by your shares, not your personal assets. If you firm does not exit, this could have some tax consequences for you, so it's important to check with your tax advisor for your particular circumstance.

What if my shares are worth less than the financed amount?

Because the financing is non-recourse, your obligation is limited to the value of your shares. You are not personally liable for any shortfall.

Do I have to sell my shares to repay?

In most cases, yes. While Secfi does not take ownership of your shares at any point, at the time of settlement you will need to sell shares to repay the required settlement amount. In some cases, you may be able to settle with cash instead of selling shares — however, this must be specified in your contract, and Secfi needs to be informed at least 5 days prior to settlement if you plan to use cash.

Where can I see my repayment terms?

You can view your terms by navigating to your financing deal in the Secfi portal or by reviewing your contract. If you have questions about your specific terms, reach out to operations@secfi.com.