Most of the attention a stock loan attracts goes to a single number — how much can be advanced against the shares. That is the right first question, and we treat it at length in our note on how LTV is set on an SGX counter. But an advance is only half of a facility. The other half is its shape over time: how long it runs, what it costs, how the interest is met, and how it is repaid. These terms — tenor, rate, servicing, and repayment — decide whether a financing sits quietly in the background for the period a borrower needs it, or becomes something to manage. This note explains how each is set on a Singapore stock loan secured by SGX-listed shares.
Tenor: fitting the term to the purpose
There is no standard term, because a stock loan is not a standard product. A facility is structured to the purpose it serves. A borrower bridging the timing of an acquisition needs a different horizon from one funding a private commitment, and both differ from a founder who simply wants to hold a position through a defined period before any sale is contemplated. The tenor is set to that need — commonly over a term of one to several years — and agreed at the outset alongside the advance and the rate, so the whole facility fits the situation rather than the situation being forced into a fixed maturity.
Where a borrower expects the need for liquidity to extend beyond a single term, the honest thing is to say so at the start. A facility shaped with a longer horizon in mind, or with renewal contemplated, is a cleaner arrangement than one designed for a short period and then repeatedly patched. The tenor is a design choice, not an afterthought.
The rate, and what actually sets it
The interest rate on a share-backed facility is set case by case, not read off a rate card — for the same reason there is no single published loan-to-value. The rate reflects the characteristics of the specific collateral and the shape of the facility, and those inputs are observable rather than arbitrary.
What the rate reflects
- The counter's liquidity and free float — how readily the collateral could be realised in an orderly way if it ever had to be.
- Volatility — how far the price can travel, and therefore how much buffer the facility must carry.
- Concentration — how large the charged stake is against the counter's daily volume and total float.
- Size and tenor — the amount advanced and how long it runs.
- Recourse profile — how much or how little the lender can reach beyond the shares themselves.
- Prevailing funding conditions — the broader cost of money at the time the facility is struck.
These pull in a consistent direction. A liquid, lower-volatility SGX position financed conservatively — a well-covered advance against a deep, index-weight name — generally prices more keenly than a concentrated stake in a thinly-traded counter carried at a fuller advance. The rate and the LTV are not independent dials; they are two expressions of the same read on the collateral, which is why the advance you accept and the recourse profile you carry are best decided together with the price. An indicative rate is provided only after the counter and the holding have been reviewed, and, as across the platform, transactions are typically structured from SGD 5 million upward.
Servicing: prepaid or periodic interest
How the interest is actually met is a genuine choice, and it materially changes how a facility feels to hold. Two approaches are common, and the right one depends on what the borrower wants from the liquidity.
Prepaid interest. The interest for the term is effectively netted from the advance at drawdown, so that no cash servicing is required during the life of the facility. The borrower draws a net amount and then has nothing to pay until maturity. This suits a holder who wants clean, servicing-free liquidity for a defined period — capital that arrives once and asks nothing further of the borrower's cash flow until the end.
Periodic servicing. The interest is paid across the term on an agreed schedule. This preserves the full advance at drawdown — none of it is consumed by prepaid interest — and suits a borrower who is comfortable meeting a regular payment and would rather keep the whole sum working. Neither approach is better in the abstract; the servicing method is agreed before funding and written into the documentation, so the borrower knows exactly what the facility asks of them and when.
| Consideration | Prepaid interest | Periodic servicing |
|---|---|---|
| Cash servicing during the term | None — nothing to pay until maturity | Regular payments on an agreed schedule |
| Net amount received at drawdown | Lower — interest is netted up front | Full advance preserved |
| Best suited to | Clean, servicing-free liquidity for a set period | Keeping the whole sum working, paying as you go |
| Administrative rhythm | Set once, then quiet | An ongoing, predictable commitment |
Rollover and renewal
As a maturity approaches, a facility can often be renewed or rolled over — but subject to a fresh assessment, not as a matter of right. The position is reviewed as it then stands: the counter's liquidity and price behaviour, the size of the outstanding advance against the current value, and the borrower's continuing need. A renewal is discussed on terms that reflect that assessment. This matters because a borrower should not treat a single-term facility as if it were indefinite. If the liquidity is likely to be needed for longer, that expectation belongs in the first conversation, so the facility is shaped for it from the outset rather than depending on a rollover that is never guaranteed.
A rollover is a fresh look at the position, not an automatic extension. The cleanest facilities are the ones whose horizon was honest at the start.
Repayment, and the return of the shares
Repayment is usually straightforward: a bullet repayment of principal at maturity, with the interest either serviced along the way or prepaid at the start. On repayment in full, the charge over the collateral is released and the shares are returned to you unencumbered, in the same account they were held in — a mechanic we set out in our note on how pledged SGX shares are held and charged. Where the documentation allows it, early repayment releases the collateral sooner. The through-line is the one that defines a stock loan against every alternative: the shares are charged, not sold, and repayment restores the position to you in full.
Seeing the whole economic picture
The terms that shape a facility over time — tenor, rate, servicing method, repayment, and any costs — are set out transparently before funding, in the term sheet and the facility documents, so there are no surprises during the term. Any costs beyond interest, such as the borrower's own legal or any documentation costs, are confirmed up front. We would rather a borrower weigh the complete picture — advance, rate, servicing, tenor, and costs — before committing than discover a component later. Specific terms and any regulatory or tax treatment are confirmed with your own Singapore advisers; we act as arranger and introducer and do not provide legal, tax, or financial advice. Tell us the counter, the size of the holding, and how long you need the liquidity, and the shape of the facility follows from there.
Frequently asked questions
01What tenor can a Singapore stock loan run for?
02How is the interest rate on a stock loan determined?
03Is interest paid periodically or up front?
04Can a stock loan be rolled over or renewed at maturity?
05How is a stock loan repaid, and what happens to the shares?
06Are there fees beyond interest?
This is a general description of how the term, pricing, and servicing of a share-backed facility are structured, not legal, tax, or financial advice. Indicative figures depend on the specific counter and holding and are confirmed in each transaction's documentation.