Employee Stock Ownership Plans

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Whether you’re expanding your business or transitioning ownership, find flexible financing that fits with your long-term ESOP strategy.

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Get the market intelligence, current industry knowledge and regulatory best practices you need to navigate an ESOP transaction.

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Seasoned professionals—with years of experience working complex deals in various industries—guide you throughout the life of your ESOP.

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Our Expertise

We maintain over 1,200 banking relationships with ESOP companies, including over 600 lending relationships—more than any other US bank.

This unparalleled expertise in ESOP transactions positions us as an industry leader. Let us help you by:

  • Advising on ESOP alternatives
  • Assisting in navigating complex ESOP structuring issues
  • Consulting and financing new and second-stage ESOP transactions
  • Giving advice regarding M&A and corporate finance transactions involving ESOP-owned companies
  • Providing advice on mature ESOP issues, including repurchase obligation and regulatory and compliance matters

Types of ESOPs

Leveraged ESOP

An ESOP is leveraged if it borrows money to purchase the company's stock. The loan may be from a financial institution or the selling shareholder may finance the transaction by taking back a note for part or the entire purchase price.  The sponsoring company usually uses its assets to secure the financing.

Non-Leveraged ESOP

This type of ESOP is one in which annual contributions, up to a maximum of 25 percent of the amount of covered payroll, are made each year to the ESOP in stock and/or cash.

ESOP Trust

The ESOP trust purchases employer stock with the loan, either directly from the company or from its shareholders. The company is then able to make fully deductible principal and interest payments to the ESOP trust that repays the loans. As the loan is repaid, the stock held as collateral on the loan is released to individual employee accounts.

Related Content

Terrazzo & Marble’s Move to Complete Employee Ownership

J.P. Morgan’s ESOP Advisory Group closed the deal in less than four weeks to help the natural stone distributor become 100 percent employee-owned.

View video about Terrazzo & Marble’s Move to Complete Employee Ownership

Is an ESOP Right for Your Business?

The tax and employee benefits offered by ESOPs make them a succession planning option you may wish to consider seriously—here's why.

Read article about Is an ESOP Right for Your Business?

Is an ESOP Right for Craft Brewers?

Five reasons why an employee stock ownership plan might be the perfect solution for craft breweries.

Read article about Is an ESOP Right for Craft Brewers?

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See how we help companies like yours maximize the benefits of an ESOP in our ESOP Advisory Group Capabilities brochure.

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