ESOP Business Solutions

An Example

The following diagram illustrates a typical leveraged ESOP transaction structure: 1. Corporation borrows $5,000,000 from a financial institution (Note: It may be desirable to use "seller" financing from the shareholder). 2 .The trustee of the ESOP engages an independent valuation firm to provide a valuation opinion regarding adequate consideration for the proposed stock purchase. 3. The ESOP borrows $5,000,000 from the corporation. 4. ESOP purchases stock from shareholders for $5,000,000.