Frequently asked questions

What is Multiply?

Multiply is a financial technology company that provides employees of private companies access to liquidity. We do so by offering a line of credit secured by your private company equity, which is typically options and/or RSUs.

What is a line of credit?

A line of credit provides you a facility to borrow money “on demand” without opening a new loan each time you want to draw funds. Think of it as an approval to borrow up to a certain amount, without any obligation to actually borrow money. This means you don’t need to know the amount you’ll eventually want to borrow at the time you open the line of credit. Our line of credit is free to open and you’re only charged when you draw down funds.

What do people use lines of credit for?

Common use cases include exercising options, purchasing real estate, paying for life events like weddings, honeymoons, or the birth of a child, debt consolidation, investment diversification, home improvements, apartment upgrades, medical and dental procedures, or other personal expenses.

What fees does Multiply charge?

Opening a line of credit is free. Multiply charges a 2.5%-3.0% draw fee on funds actually borrowed from the line of credit. The lower draw fee rate is available when Multiply partners with your company.

Monthly interest is a base rate of the three month term SOFR plus a fixed 7-8% depending on whether your company has partnered with Multiply.

How does Multiply compare to a tender offer or secondary sale?

Tender offers or secondary sales give employees the opportunity to sell their equity at a fixed price. The sales proceeds are typically taxable to the seller, employees give up potential future upside on shares sold, and tender offers are typically offered infrequently. With Multiply, you keep every share, generally do not owe taxes on money drawn from the line of credit, and can access your line of credit at any time.

How does Multiply determine how much I can borrow?

Multiply evaluates each company independently and sets a percentage of the total value of an employee’s equity we are able to support. This percentage, known as the loan-to-value (LTV) ratio, is multiplied by the value of an employee’s vested and exercised stock options as well as single trigger RSUs to determine their available credit.

What is Multiply’s relationship with my company?

Multiply partners with companies directly and is only available to employees at partnered companies. If Multiply is available to you it has been approved by your company leaders.

If I borrow money, when do I have to pay it back?

Until an exit event occurs or term is reached, your only required payments are accrued interest. Money borrowed must be repaid at the end of the loan term, along with any applicable interest payments. Typical Multiply loan terms are 4 years or 10 days after the expiration of any applicable lockup period after a company liquidity event, whichever comes first. Check your individual borrower agreement for more details.

Can I pay my loan back early?

Funds borrowed can be repaid at any time before the term expiration. There are no fees or penalties for early payment.

How is a line of credit with Multiply different than a personal loan from my bank?

There are several key differences between a line of credit and a personal loan from a bank. A Multiply line of credit is secured by your stock as the only collateral. You do not bear any risk related to company performance. Personal loans typically carry personal liability, meaning your personal assets are at risk in the event of non-payment. Additionally, personal loans will typically involve credit reporting whereby the amount you can borrow is determined in part by your credit score. With Multiply, we underwrite your company rather than you individually, meaning that we never have to work with credit bureaus to report on any amount that you borrow or as part of an approval process.

Is the line of credit revolving?

Yes, the line of credit is revolving. This means if any of the originally borrowed amount is repaid before the loan term expires, it may be immediately borrowed again.

Will using Multiply affect my credit score?

Using Multiply will not affect your credit score. We do not need to check your credit or make reports to credit bureaus as the loans are secured by your private company equity.

Is a line of credit different than a credit card?

A line of credit and a credit card are similar in that they’re both revolving lines of credit. One key difference between a traditional credit card and Multiply is that, with a credit card, your ability to qualify and spend is based on your personal financial situation evaluated through a credit check and reporting to credit bureaus. With Multiply, your line of credit is secured by your private equity, so your eligibility and available credit are not determined by your credit score.

How quickly do loans get funded?

Borrowers typically receive funds the next business day. We transfer funds over ACH.

What’s the interest rate?

We charge a base rate of the three month term SOFR plus a fixed 7-8% depending on whether your company has partnered with Multiply. For example, using the July 2024 benchmark rate of 5.32% the APR would range from 12.32%-13.32%.

Multiply charges a 2.5%-3.0% draw fee on funds actually borrowed from the line of credit. There is no annual fee or early-payment penalty.

What are the interest payment options?

Interest payments must be made monthly using a linked bank account over ACH. We do not currently accept other forms of payment like checks, wire transfers, or credit cards.

Can the line of credit limit increase?

Your line of credit can increase if the value of your collateral increases. There are generally two ways this can happen. One is that you increase your owned shares. This can happen if you exercise options or have new RSAs or single trigger RSUs vest. The second is that the value of your shares may increase if Multiply re-underwrites your company. If your eligible collateral has increased and would like your line of credit upsized, please contact us to start the process.

Can the line of credit limit decrease?

Your line of credit can decrease if the value of your collateral decreases. There are generally two ways this can happen. One is that Multiply re-underwrites your company at a lower per share value. The other is that you decrease the number of eligible shares you can pledge to your loan, for example if you pledge unencumbered shares to another lender or if you sell shares not pledged to your existing line of credit in a tender offer.

Note that if the value of your line of credit decreases based on a new underwrite of your company, you do not need to return any previously borrowed funds. Multiply does not force “margin calls” or “maintenance calls” in these scenarios. However, depending on how much you’d previously borrowed and the new share value, you may not be able to draw additional funds.