The borrower of the stock is obliged to pay a daily borrow fee, which is calculated as a percentage of the value of the stock loan. An easy to borrow stock for an institution might incur an annualised borrow cost of around 0.5% or thereabouts. Difficult to borrow stocks might cost 15% annualised or even more.
There is no limit to how long the borrower can go... think of it as periodic tenancy for a rental. Either side can close out the lease (with less notice in stocks, but you get the idea)
Settlement costs are no different.
As for short squeezes, yes in order to close out short positions, there is gross demand of up to 30M shares or so, but in order to close out long positions, there is gross supply of up to 494M shares or so (464M + the extra 30M held long). If all the shorters decided to close out at once, that would be ideal conditions for what is usually described as a short squeeze. I don't know what it is called if the holders decide to bail out at once, but it's the opposite.
FXL Price at posting:
$1.08 Sentiment: None Disclosure: Not Held
(20min delay)