If you never get a chance to sell that stock at a high enough price to cover that 35K loan, are you still personally liable for it?

Generally if a loan is collateralized, you are not liable for it beyond the collateral.

It's called margin, and you can only margin (use as collateral) shares that are liquid - i.e. publicly traded.

I know what margin is, and it's definitely possible to collateralize a loan with private shares. If you had options for 0.1% of Facebook before the IPO I guarantee somebody would write you a loan.

The question I was asking was: does any lender do this as a matter of policy as opposed to one-offs? The answer appears to be yes - Silicon Valley Bank appears to have let customers collateralize loans with private shares.

Yes, but before they're liquid they're close to worthless. A bank can't pay their bill with collateral that they can't liquidate after they repossess it. If the company is already scheduled to IPO, that huge risk mostly disappears, so of course someone would write that loan.

As for Silicon Valley Bank... They're serving the needs of the individuals around them. It's definitely not a common thing, and you're probably not getting anything close to a car or mortgage interest rate. (But still probably better than an unsecured loan.)

From their own copy: [0]

> Our tailored lending solutions can help you unlock the value of your private assets and simplify your financial life—in a way many traditional banks can't or won't.

[0] https://www.svb.com/private-equity-venture-capital/private-b...

For public companies, I know it's true. I'm not sure about private companies.

It's basically impossible with a private company.