ESOP Business Solutions

Who is a Good Candidate for an ESOP Business Solutions?

Motivations

  • What if your company could take a loan from a bank (perhaps to fund expansion or facilitate ownership succession to a key management group or family members) and the repayments of the loan principal were tax deductible?

  • What if the proceeds of this loan could be used to buy a portion of your stock ownership in the company and you didn't incur any tax liability?

  • What if such a sale did not require you to give up control of your company in the process?

  • Finally, what if your S corporation could become a "tax-exempt" entity?

If any one or all of these scenarios is appealing, you should probably be investigating an ESOP.

Candidate Characteristics
 The following highlights some positive characteristics:

Financial Factors

Business Factors

$1,000,000 Average EBITDA

C or S corporation (or the willingness to create or convert to a C or S corporation)

$1,000,000 in Compensation Expense

Stable and Established Business (highly cyclical companies are not good ESOP candidates)

25 employees

Strong Management Team (or the need and willingness to create a strong team)