What if I can't afford to exercise before my options expire?

You have a few options: exercise only part of your grant, use a stock-option exercise financing provider that fronts the cost in exchange for a share of the upside, or — if your shares are already vested and transferable — sell some shares in a secondary to raise the cash. Mind your post-termination exercise window, which is often around 90 days.

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Free tool · United States

What will it really cost to exercise your stock options?

Q: Why does exercising ISOs trigger AMT?

When you exercise incentive stock options (ISOs) and hold the shares, the bargain element — the difference between the fair market value and your strike price — is not taxed as regular income, but it is added back for the Alternative Minimum Tax (AMT). If it is large enough, it can create a tax bill in the year you exercise, even though you have not sold anything or received any cash.

Q: How are NSOs taxed at exercise?

Non-qualified stock options (NSOs) are generally taxed as ordinary income on the spread (fair market value minus strike price) at the moment you exercise, and this is usually subject to payroll withholding. That is different from ISOs, where the spread hits AMT rather than ordinary income.

Exercising ISOs or NSOs isn’t just the strike price. There’s the tax — ordinary income for NSOs, or the Alternative Minimum Tax (AMT) for ISOs — and it can land in the year you exercise, before you’ve sold a single share. Estimate the full cash you’d need, in ten seconds.

Options to exercise — number of vested options

Strike price / share ($) — from your grant

Current value / share ($) — latest 409A or round price

Your other annual taxable income ($) — rough; helps size the AMT

Filing status

Total cash you’d need

$—

strike cost + estimated tax from exercising

Cost to exercise (strike)$—

Bargain element (spread)$—

Estimated AMT from exercise$—

Total cash before you sell$—

A rough directional estimate for orientation only — not tax advice. It uses simplified 2025 federal figures, ignores state tax, credits, existing AMT, the standard deduction and your full return, and assumes you hold the shares (an ISO exercise-and-immediate-sale is taxed differently). AMT is genuinely complex — confirm your number with a qualified US tax adviser before you act.

Why this surprises people: with ISOs, exercising and holding creates a tax bill on paper gains — cash out, nothing sold. That’s the classic trap behind the estimated billions of options left unexercised. Knowing the number early is how you avoid it.

What do you want to do next?

Can’t afford to exercise?

Specialist providers can front the exercise cost (and sometimes the tax) in exchange for a share of the upside — non-recourse, so you don’t owe if the shares end up worthless.

See financing options ↓

Rather sell than exercise?

If your shares are already vested and transferable, selling part of your stake privately can fund the rest — or simply get you liquidity now.

List your shares →

Now plan the whole move

You’ve got the number — next is doing it right: exercise, 83(b), clearing ROFR & board approval, and selling, without missing a deadline. The US toolkit is the step-by-step.

Plan the exercise + sale properly →

Free: the Equity Starter Kit

Leaving, or just weighing it up? The free kit covers exactly this — your exercise-window deadline, the 83(b) question, the cash to plan for, who’s across the table, and what to do if you can’t afford to exercise. Instant download, no email required.

Download the free kit →

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Exercise-financing providers (independent)

If exercising is the right move but the cash isn’t there, these established US providers fund option exercises. We’re not affiliated with them and earn nothing from these links — they’re here because founders and employees ask us who to talk to. Compare terms carefully.

Secfi — exercise financing and equity planning
EquityBee — investors fund your exercise for a share of the gain
ESO Fund — non-recourse exercise and tax financing

Questions people ask

Why does exercising ISOs trigger AMT?

When you exercise incentive stock options and hold the shares, the spread (value minus strike) isn’t regular income — but it’s added back for the Alternative Minimum Tax. If it’s large enough, you can owe tax in the exercise year even though you’ve sold nothing and received no cash.

How are NSOs taxed at exercise?

Non-qualified options are generally taxed as ordinary income on the spread at exercise, usually with payroll withholding. That’s different from ISOs, where the spread hits AMT rather than ordinary income.

What if my options expire before I can afford to exercise?

You can exercise only part of the grant, use an exercise-financing provider, or — if your shares are vested and transferable — sell some in a secondary to raise the cash. Watch your post-termination exercise window, often around 90 days. More on selling after you’ve left →

General information only — not financial, tax or legal advice. Every situation is different; confirm your own numbers with a qualified US tax adviser before exercising. PrivateTechShares makes introductions only: it is not a broker, does not hold funds, and does not execute or advise on transactions. Figures use simplified 2025 US federal assumptions and exclude state taxes.