Manufacturing employee shaking hands with manager
Manufacturing employee shaking hands with manager

financing for employee stock ownership plans

What is your succession plan?

An employee stock ownership plan (ESOP) is a tax-advantaged ownership transition alternative that transfers ownership of a business to its employees, as opposed to other third party buyers. ESOPs often match business owners’ long-term goals for the company and their legacy, have the potential to generate meaningful tax advantages to both the selling shareholders and the company, and are known to inspire greater employee loyalty. ESOPs are often used to sell a minority interest for diversification and estate planning purposes. While ESOPs can be used effectively in a variety of ways, the process of transitioning to an ESOP ownership structure may require borrowing to finance a portion of the transaction. Our team will work with you to determine the best solution for your situation and help you navigate the unique accounting, transaction structures, and regulations that come with selling an ESOP.

Creating a lasting partnership well beyond the transaction

Implementing an ESOP sale can be a complex process resulting in significant changes to the cash flow and balance sheet of your business. We’re confident we can help guide your business in ways other banks can’t because our team of professionals is knowledgeable in this space and has experience in a variety of industries. They understand the nuances of ESOPs. Our commitment to working closely with you throughout the entire process will help ensure a smooth and sustainable transition from the initial transaction until long after the last share is released.

Meet the team

Alan Carlyle, Managing Director ESOP Finance Group

With more than 20 years of ESOP lending experience at large banks, Alan has covered hundreds of transactions across many industries. He is an active member in the ESOP Association and National Center for Employee Ownership. Alan also brings experience in several other lending areas rounding out his knowledge of complex lending solutions for companies large and small.

Call Alan: 313.333.0928

Sean Kelleher, Managing Director ESOP Finance Group

Sean focuses on advising company owners and bankers on the benefits of ESOP and understanding the complex issues surrounding these transactions. He has 25+ years’ experience working with complicated financing transactions and problem solving and has led multiple teams in various specialties for national and regional banks.

Call Sean: 312.788.6785

Brian Lowe, Vice President ESOP Finance Group

Brian is deeply involved in the ESOP community and possesses nearly a decade of dedicated experience in the banking sector. He has expertise in the areas of ESOP finance, traditional Commercial and Industrial (C&I) lending, Small Business Administration (SBA) Lending, securitization lending, traditional consumer lending, portfolio management, and financial analysis, in addition to active membership to professional organizations including the National Center for Employee Ownership (NCEO), and The ESOP Association (TEA). Brian further contributes to the growth of the industry as a member of the ESOP Alliance, a young professionals group dedicated to fostering knowledge and collaboration within the ESOP Community.

Call Brian: 513.246.2171

We want to help

Getting financing isn’t an overnight decision. There are lots of options to consider and each comes with unique questions.

But don’t worry, we’ve seen it all and can help you through it.

Our lending options include leveraged cash flow lending to asset-based lending, including:         

  • Term loans
  • Revolving lines of credit

We’re ready to work with you to finance a solution that will work to drive your business’s continued success.

Drop us a line by submitting the form and we’ll be in touch soon.


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Frequently asked questions

An employee stock ownership plan, or ESOP, is an attractive employee benefit plan and corporate financing tool, which allows employees to become beneficial owners of the stock in the business. The structure of an ESOP can range from simple to complex. Typically, a business borrows money from lenders or investors, and then loans the ESOP trust funds for the purpose of acquiring shares. This type of plan can also provide the business with various tax benefits..

Learn more from The ESOP Association.

The advantages and benefits of an ESOP are varied depending on whether you are the employee/participant, an existing shareholder, or the employer.

Employee benefits
An ESOP can provide an employee with significant retirement assets over a career in addition to other savings. Since the stock is allocated to each employee’s account annually, based solely on a contribution by the business, the employee bears no cost for this benefit.

Shareholder benefits
Initially, an ESOP is often used as an ownership transition tool, whereby a business owner sells a portion or all shares to a newly formed ESOP Trust set up for the benefit of Employees. Sellers often have the option to defer recognizing any gain and related tax on the sale as well. The incentives often make ESOPs very competitive with third party buyers.

Once established, an ESOP can provide a market for the stock of shareholders providing liquidity not otherwise available. This feature can be used by minority owners, ESOP participants, beneficiaries, major shareholders, or estates of deceased shareholders.

Employer benefits
ESOP companies benefit from key tax benefits that reduce or eliminate Income Taxes for ESOP-owned companies. Another major benefit is the positive cultural impact that results when employees have an equity ownership in the company.

All loans subject to credit review and approval.

Structure, Rates, and Terms are dependent upon the credit profile of the borrower and unique to each transaction.


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