JPMorgan softens stance on share-backed loans to target AI-era wealth – report

JPMorgan Chase is easing its approach to loans secured against shares held by employees and early investors in recently listed companies, the Financial Times reported citing people familiar with the matter.

Under its usual policy, the US banking giant does not accept shares in a company that has been public for fewer than 135 days as collateral for lending.

But before SpaceX’s IPO in June, the bank told its bankers it would be willing to lend against shares in Elon Musk’s rocket and AI company earlier than that, the report said.

People inside JPMorgan told the FT they expect the bank could take a similar view if Anthropic, the company behind the Claude chatbot, goes public. No final decision has been taken, however.

JPMorgan earned $75m from its role on the SpaceX listing, the report said.

The development points to broader efforts by banks and asset managers to attract business linked to the substantial wealth being created by the AI boom.

JPMorgan’s policy has been more conservative than the 30-day waiting period typically observed by broker-dealers involved in IPOs under US securities rules.

Other banks, including Goldman Sachs, generally do not wait beyond those 30 days before offering such loans, according to people familiar with the matter.

JPMorgan said its policy had not changed.

“Our practices exceed regulatory requirements, and we have always assessed transactions on a case-by-case, client-by-client basis, factoring in elements such as market liquidity,” the bank told the publication.

For wealthy individuals, borrowing against shares can be more attractive than selling them, especially if they want to reduce tax effects.

For banks, the key issue is how easily the collateral can be sold if required.

Private shares are harder to trade than publicly listed stock. Even after an IPO, lock-up agreements may still limit sales, while newly listed shares can also be volatile.