Flutterwave employees can use company shares to secure loans
Owning shares in a company does not mean an employee can easily turn them into cash. At Flutterwave, staff now have another option: borrowing against their shares instead of selling them.
Flutterwave
Owning shares in a company does not mean an employee can easily turn them into cash. At Flutterwave, staff now have another option: borrowing against their shares instead of selling them.
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Owning shares in a company does not mean an employee can easily turn them into cash. At Flutterwave, staff now have another option: borrowing against their shares instead of selling them. The Nigerian founded payments company has partnered with Techdollar, a private credit platform that offers loans backed by equity in privately held businesses. The idea is straightforward. An employee who needs money can use eligible Flutterwave shares as security for a loan and keep ownership of those shares. But the arrangement also puts that equity at risk if the employee cannot repay the debt.
The companies have not disclosed the specific loan terms available to Flutterwave staff, including interest rates, borrowing limits and repayment periods.
The cost matters more than the headline offer
“The loan gives employees access to cash, but their shares could be sold if they fail to repay.”
Techdollar's general lending model has been reported to offer repayment periods of six to 12 months, with monthly interest rates of between 0.8% and 1.5%. These figures have not been confirmed for the Flutterwave programme. The difference matters. An employee borrowing against shares needs to know the total amount payable, not just how much cash they can access upfront.
For example, if someone borrows $10,000 at a simple interest rate of 1% a month, the interest would amount to $100 a month. Over six months, that would be $600 in interest, excluding fees and any differences in the repayment structure. Whether the loan is affordable will depend on the employee's income, other financial commitments and the repayment deadline.
What happens if an employee cannot pay?
The shares are there to protect the lender. If a borrower defaults, the loan agreement may allow the lender to sell those shares to recover the outstanding debt. That creates a difficult situation for an employee who borrows against equity because they expect Flutterwave's value to rise. They could end up losing some of their ownership if they cannot meet the repayment terms.
The value of shares in a private company can also be difficult to establish. Unlike shares traded on a stock exchange, there is no continuously available market price. Employees should check how their shares will be valued and whether a fall in value could trigger additional requirements from the lender. Another unanswered question concerns employees who leave Flutterwave before their loans are repaid. The publicly available details do not explain whether leaving the company changes the loan conditions.
A practical option, with conditions
For employees at private technology companies, shares can represent a substantial part of their compensation without providing money they can spend immediately. Selling may not be an easy option, so borrowing against that equity offers an alternative. But employees will need the full terms before deciding whether it makes sense. The interest rate, fees, repayment period and rules around default will determine the real cost.
Flutterwave and Techdollar have not publicly detailed those terms for this arrangement. Until they do, employees will have to assess the offer using the conditions set out in their individual loan agreements.
