The same investor's balance sheet can support a 90% advance rate against one asset and a 0% advance rate against another, at the exact same lender, on the exact same day. Custom and tailored lending exists specifically because a standardized advance-rate schedule, the kind that works fine for diversified public securities, breaks down completely once collateral gets concentrated, illiquid, or simply unlike anything on a normal rate sheet.
Why this needs its own category
Standard securities-based lending, covered on this site's SBL guide, works because the collateral (diversified, liquid, publicly-traded stock) has a continuously observable market price and can be sold quickly if a lender needs to liquidate it. Custom lending exists for everything that breaks one or both of those assumptions: a concentrated single-stock position, pre-IPO or restricted stock, fine art, aircraft, yachts. Each carries its own valuation difficulty, liquidity profile, and, in some cases, legal transfer restrictions that a generic rate sheet simply cannot price.
Concentrated stock: the clearest documented example
Interactive Brokers' own published margin schedule shows the mechanism directly: margin requirements rise as a position grows relative to the underlying company's total shares outstanding, reaching a full 100% requirement, meaning zero borrowing capacity against that specific position, at concentrations of 9% or more of shares outstanding for a stock (5% for an ETF). The lesson generalizes well beyond IBKR's specific numbers: a large dollar position in a small or mid-cap company can represent a meaningful share of the entire company's float, and gets treated very differently from the same dollar amount in a large, liquid name, or spread across many names. This site's advance-rate and haircut guide covers the general mechanism further.
Pre-IPO and restricted stock: liquidity that doesn't exist yet
Borrowing against pre-IPO or restricted shares is possible at some lenders but meaningfully harder than borrowing against freely tradable public stock, for reasons that compound rather than simply add up: the shares often carry contractual transfer restrictions, the near-term path to actual liquidity (an IPO, an acquisition) is uncertain, and the valuation itself depends on a private mark rather than a continuously observable public price. Lenders willing to extend credit against this kind of collateral generally require significantly lower advance rates and more restrictive terms than the same dollar value of freely tradable stock would receive, and many lenders decline this category of collateral entirely.
Art: a documented, meaningfully lower advance rate
Fine-art-backed lending is one of the better-documented corners of custom lending specifically because several major private banks, including Bank of America, publish general terms for it. Bank of America's own art-lending program is commonly cited at roughly 50% loan-to-value against appraised collateral value, a materially lower advance rate than the 70-90% range commonly cited for diversified, liquid securities. The gap is not arbitrary conservatism; it reflects art's genuine illiquidity, the subjectivity inherent in any appraisal, and the real risk that a valuation could be disputed or stale by the time a lender might need to realize it.
Aircraft and yachts: the far end of bespoke
These assets sit at the far end of the custom-lending spectrum: financing typically requires specialized appraisal, insurance structuring, and legal work specific to the asset's registration jurisdiction, maintenance condition, and resale-market depth, rather than anything resembling a standardized rate schedule. This is the clearest illustration that "custom lending" is not a product with a rate card at all; it is a description of individually negotiated credit, asset by asset, relationship by relationship.
The pattern underneath all of it
Every category above sits on the same underlying spectrum: the more liquid, transparent, and independently verifiable a collateral's value, the higher the advance rate a lender will offer against it, and the more standardized the terms tend to be. The more illiquid, concentrated, or subjectively valued the collateral, the lower the advance rate, and the more the terms become a genuine negotiation rather than a lookup on a published schedule.
What to ask before pledging non-standard collateral
- How does the lender actually determine and periodically re-verify the appraised value of this specific asset, and how often does that valuation get refreshed?
- What specific advance rate applies to this asset class at this lender, and how does that compare to what the lender offers for diversified, liquid securities?
- What happens, contractually, if the asset's appraised value is disputed or falls, given that this collateral type typically cannot be sold as quickly or transparently as a public security?
- For pre-IPO or restricted stock specifically: what transfer restrictions apply, and how do they affect the lender's ability to actually realize the collateral if it needed to?