IPO Funding, also known as IPO Financing, is a short-term loan given to investors by financial institutions. Investors avail this loan to invest more in IPOs and increase their application size to enhance their potential returns from an upcoming IPO. The institution lends the money and charges interest for the number of days the loan amount is outstanding. Once the shares are listed and if the investor gets the allocation, the shares can be sold, and the proceeds can be used to repay the loan and the remaining amount can be taken by the investor.