Bitcoin holders confronting real-world expenses have historically faced a binary decision: liquidate their coins or find cash elsewhere. SALT Lending says a growing share of its borrowers are now choosing a third path.

In its latest report, the Denver-area lender states that customers are increasingly turning to Bitcoin-backed loans to cover everyday financial needs, including tuition payments, business working capital, home purchases, and debt consolidation.

How the Loans Work

Under the structure, a borrower posts Bitcoin as collateral, receives cash, and gets the coins back once the loan is repaid. The arrangement provides liquidity without a sale, allowing borrowers to retain ownership of the Bitcoin along with any potential appreciation that comes with it.

SALT offers fixed-rate terms of one, three, or five years, aimed at both personal and business customers. Pricing is tied to the amount a borrower takes out relative to the value of the collateral — a ratio known as loan-to-value, or LTV.

At the conservative end, the company says annual percentage rates start at 7.49% for a one-year loan at 30% LTV. Rates climb as the ratio rises: SALT lists a top APR of 10.50% for loans at 70% LTV.

There are no credit checks and no income verification. Once approved, funding typically lands within 24 to 48 business hours, according to the company.

The Track Record SALT Cites

Founded in 2016, SALT says it has funded more than $2 billion in Bitcoin-backed loans since launch. The company also claims a 100% collateral return rate, meaning no customer has lost collateral on its watch.

SALT says it holds collateral in institutional custody and does not rehypothecate it. Rehypothecation is the practice of a lenderusing a customer's pledged assets for its own lending or trading. That custody stance sits against recent industry history: the 2022 crypto credit crisis saw several prominent lenders — including Celsius, BlockFi, and Voyager — file for bankruptcy, and the ways customer collateral had been reused or deployed became a central issue in the fallout.

The company currently operates in 47 US states plus Washington, D.C. It has plans for licensing expansions into California and Nevada, with those targeted for the 2025 to 2026 window.

One caveat is worth keeping front and center: SALT's figures are its own. The lending volume, the clean collateral record, and the claims about what borrowers spend the money on have not been independently verified. The breakdown of loan purposes, in particular, has not been quantified by any third party.

Why Borrowers Might Bother

For long-term holders, the appeal centers on avoiding a sale. Selling Bitcoin to cover tuition means giving up the position entirely. Borrowing against it keeps the position intact, at the cost of interest and some liquidation risk. The structure also sidesteps a common tax trigger: in the US, selling an appreciated asset can realize capital gains and a resulting tax bill, whereas borrowing against collateral does not by itself create a taxable event.

For small business owners, speed matters as much as structure. A one-to-two-business-day turnaround with no credit check is a very different experience from a traditional bank's working capital process.

The more cautious read is that the risks have not disappeared. A borrower at 70% LTV paying 10.50% is carrying real exposure to a volatile asset while servicing fixed debt. Across collateralized lending generally, a sharp drop in collateral value typically prompts a margin call — a demand to post additional collateral or pay down the loan — which is the practical mechanism behind the liquidation risk.

Things to watch from here include whether SALT secures the California and Nevada licenses on its stated timeline. Those approvals would bring the lender close to nationwide US coverage. It is also worth watching whether independent data ever emerges to confirm the shift in loan purposes the company describes.