Collar Advance
Securely borrow for significant life events.
Wealth Farming lets you access liquidity without a risky line-of-credit on your stock. With our unique Collar Advance, you’ll borrow what you need for life’s big purchases—all with deferred taxes and certain protection against market turbulence.
Get liquidity for your purchase
Borrow up to $900K for every $1M in stock.
With a Collar Advance, generally known as a variable prepaid forward contract, you get instant liquidity on your stock up to 90%—much higher than a typical margin loan. The cash generated can be used for any purpose, including a home purchase.
Actual liquidity percentage depends on the floor level, cost of the collar, and on interest rates. Implied interest is capitalized and rates are typically 0.5%-1.0% higher than comparable maturity treasury securities.Defer your tax liabilities
Defer up to $380K for every $1M in stock.
Generated liquidity is not considered a taxable transaction with a properly constructed collar. The taxes can be deferred until you choose to sell, either at the end of the contract or any subsequent rollovers.
Long-Term Capital Gains tax ranges from 23.8% to 38.4% for high-earners in 2023.Limit your risk
Protect the downside, participate in the upside.
With a 80%–160% collar, for example, you are protected on the downside below 80%, while participating in the upside up to 160%. Unlike other stock loans, you do not need to worry about margin calls or depositing additional collateral.
Keep ownership rights
Protect the downside, participate in the upside.
With a 80%–160% collar, for example, you are protected on the downside below 80%, while participating in the upside up to 160%. Unlike other stock loans, you do not need to worry about margin calls or depositing additional collateral.
Collar Advance, like many mortgage or auto loans, is a fixed-term arrangement. Most other stock-based loans are adjustable-rate instruments.
Collar Advance, like many mortgage or auto loans, is a fixed-term arrangement. Most other stock-based loans are adjustable-rate instruments.
Collar Advance is a way to get upfront cash in exchange for a contract to sell your stock at a later date.
Collar Advance is a way to get upfront cash in exchange for a contract to sell your stock at a later date.
A collar is a cost-efficient way to manage your risk exposure. You'll be protected below a lower limit, called a floor, and you'll participate till an upper limit, called a cap.
For example, a 2-year 80% – 160% collar protects you on the downside at 80% of the current stock price, limiting your loss to 20%, for a participation in the upside till 160% of the current stock price for the next two years.
If your holding goes down in value, you won’t face a margin call.
Get liquidity at a rate much higher than a margin loan. Typical contracts give liquidity at 70% to 90% of the value of the collateral. A competitive auction across multiple trusted banks ensures the best pricing and parameters.
Competitive pricing
A competitive blind auction across major Wall Street banks ensures the most favorable economics for you, as there can be variance amongst banks on pricing and the total amount received.
Experienced partners
We've built our product in partnership with known leaders that have facilitated $15B+ of concentrated equity hedging solutions.
Rigorous process
Prior to any auction, we independently model each contract, which creates an independent, wholly-unbiased perspective on price, thus leading to higher consistency.
Direct access
We’re the first company to offer this advanced financial instrument directly to consumers. We even simplified its name for you — it used to be ”variable prepaid forward contracts.”
Seamless transactions
We’re developing technology to transform an antiquated workflow into a smooth and easy online experience.
Wealth Farming lets you compare offers from multiple banks and accept the deal that best fits your needs. Instead of working directly with one provider, we offer a wholly-unbiased, blind auction across multiple competing banks that delivers the best obtainable economic outcome for you.