An ESOP may provide a more flexible solution for company owners compared to a traditional company sale. Watch the video to learn more about a leveraged buyout ESOP.
Leveraged Buyout ESOP
A leveraged buyout ESOP is a transaction that can take a variety of forms. Simply stated, an ESOP borrows money either from the corporation, from a bank, or even from a selling shareholder, and uses that financing to purchase shares. It can purchase a large number of shares. As the loan is paid off, the ESOP allocates the shares to the accounts of participants according to formulas that are in the Internal Revenue Code.
For more information about the types of leveraged buyout transactions that you can do, contact our office. We can provide you with an example of a spectrum of transactions that may be effective for your company.