Loan-to-value (LTV)
Loan-to-value (LTV) is the loan balance divided by the value of the collateral securing it. A $7M loan against GPUs worth $10M has a 70% LTV.
LTV after one year
| Equipment cost at closing | $10.0M |
| Loan at 70% LTV | $7.0M |
| Loan after 12 months at 28% amortization | $5.04M |
| Collateral at 60% of cost | $6.0M |
| LTV after one year | 84% |
Hypothetical. The 60% value one year in sits inside our conservative band for a B200 in 2026 (59-67% of MSRP).
How it works
At closing, LTV equals the advance rate. GPU deals usually close at 60-70% LTV; operators with a track record push to 75%, and first-time operators may need 40% or more equity (how to finance a GPU cluster).
After closing, two lines move. The loan balance falls with each payment and the collateral value falls as the GPUs depreciate. If the hardware loses value faster than the loan amortizes, LTV rises even when every payment is on time, which is why GPU loans typically pay down 25-30% a year over 2-4 years (private credit and ABS).
What lenders check
LTV is the cushion before a loss. In the example, the lender is still covered after a year, but by 16% of the collateral instead of 30%.
Use realized prices in the denominator. Dealer asks for a used H100 SXM ran 16-33% above what closed in our September and October 2026 Rack Report issues.
Discuss a transaction
Send us the equipment list and the loan or lease you have in mind. We will come back with an indication and the questions we would need answered.
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