You can get loans backed by the shares themselves. Ie, the lender gets x% of the shares, rather than being paid back a specific dollar amount at a later time.

In this market, the X% might well need to be so near to 100% as to make the transaction not worth doing.

For ex: Stripe has marked itself down ~50% over the last year. Suppose you think the haircut should be more like the 70% comps like SQ and PYPL have taken, and build that into the X%. Then on top of that loss buffer, you prudently demand an illiquidity premium and a profit margin. That arithmetic doesn't leave much room for the employee to retain any stock.

More explicitly, if the shares go to zero, you don't owe any money

If the shares to go 0, and the loan is discharged, the discharged amount is still considered taxable income (at least if you are subject to US taxation)

Right, that's what banks were doing for Uber employees, for AFAIK, as low as 7-digit packages. I believe the interest was conditional on an IPO happening tho, and in some cases the IPO not only got delayed but the IPO price was actually a little below secondary market price right before the IPO (same as Facebook).

I would think banks would do this again? But perhaps with a longer IPO window? Like the banks that would do this would also likely participate in the IPO anyways ...