Important Message
Important Message

NEW Employee Stock Ownership Plan (ESOP)


Employee Stock Ownership Plan (ESOP)

Identify the plan that will be most effective for your organization and workforce.

An employee stock ownership plan (ESOP) has the potential to increase employee engagement, ultimately enhancing profitability, productivity and other performance benchmarks. It also serves as an effective exit plan for family-run businesses looking to create a business succession plan.

An ESOP is an employee benefit plan that enables them to acquire full or partial ownership of a company’s stock. It also serves as a corporate finance tool that gives business owners another alternative to an Initial Public Offering (IPO) or an outright sale.

ESOP lending offers your company tax-advantaged liquidity, enabling you to partially or fully monetize your business equity interests.

ESOP transaction structures include

Leveraged ESOP—In this scenario, a company will leverage credit in order to borrow money to fund the plan. Payback of the loan occurs with shares from the plan.

ESOP Trust—This is a trust that companies might choose to set up for their employees.

Non-Leveraged ESOP—With a non-leveraged ESOP, companies do not need to borrow funds. This type of ESOP is funded by stock or cash.

To see if ESOP lending makes sense for your business, talk with your Associated Bank relationship manager today.

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