Stock loans, margin financing or share-backed financing: which fits a large HKEX holding?
Three ways to raise cash against Hong Kong-listed shares without selling them, compared on recourse, triggers, cost and disclosure.
Last reviewed 2026-10-25
Education only. This is not financial, legal or tax advice, and it is not an offer. Terms vary by provider and case. Take independent advice before you sign anything.
The short answer
Margin lending suits diversified portfolios and smaller, liquid positions. A stock loan is a debt you repay in full. Non-recourse share-backed financing, cross-border and with no personal guarantee, is often the first look for holders of large, concentrated HKEX positions.
How they compare
| Margin lending | Stock loan | Non-recourse share-backed financing | |
|---|---|---|---|
| Typical provider | Banks and brokers | Banks, brokers and specialist lenders | Specialist capital providers |
| What you owe | The full debt, often with recourse to other assets | The full debt, often with guarantees | Non-recourse; no personal guarantee |
| Concentrated single stock | Often low advance rates or declined | Case by case | Usually the core use case |
| Price-fall response | Margin call, then sale | Top-up, then sale | Top-up or sale terms as documented |
| Pricing | Usually floating (benchmark plus spread) | Fixed or floating | Set case by case |
| Structure | Revolving facility | Fixed term | Fixed term |
Margin lending
A margin facility lets you borrow against a portfolio at a broker or private bank. The advance rate for each stock is set by the lender and can change. If the portfolio value drops below the maintenance level, you get a margin call and must add cash or shares, or the lender sells.
For a single large holding in one HKEX stock, lenders often cut the advance rate sharply or decline, because one stock carries more price and liquidity risk than a mixed portfolio.
Stock loans
A stock loan is a term loan against listed shares. Advance rates, interest and term are negotiated. You repay the full amount at maturity, and lenders often ask for personal or corporate guarantees, so your other assets can be exposed if the shares fall.
A Lombard loan is the private-bank version: credit against a portfolio of securities, usually with full recourse.
Non-recourse share-backed financing
Non-recourse. Cross-border. No personal or corporate guarantee.
What to check before you sign
- Who the contracting entity is and where its capital comes from
- The advance rate and how the shares are valued during the term
- Top-up and sale triggers, and how much notice you get
- All costs: interest or fees, arrangement fees and early-exit costs
- Disclosure duties if you are a director, substantial or controlling shareholder
- Lock-ups or shareholder agreements that restrict a pledge
Frequently asked questions
Margin financing (a margin loan, also called share margin financing) is a revolving facility against a portfolio at a broker or bank, with margin calls when values fall. A stock loan is a term loan against specific shares, repaid in full at maturity. Both usually carry full recourse.
A single stock carries more price and liquidity risk than a diversified portfolio, so many banks and brokers cut the advance rate sharply or decline large single-stock positions.
They are close. A Lombard loan is a private-bank loan against a portfolio of securities, usually with full recourse. A stock loan is usually against one specific shareholding.
It depends on your position. Substantial shareholders, directors and controlling shareholders of HKEX issuers can have disclosure duties. See our guide to controlling-shareholder share pledges and take legal advice.
Holding a large HKEX position?
Squadron Capital provides non-recourse financing to holders of HKEX-listed shares. A Fast Term Sheet gives you indicative terms to compare.
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