Employee Stock Ownership Plan
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Why Convert to an ESOP?
No risk of losing customers due to selling your company.
The company is not being marketed for sale; it is a private conversion.
No price haggling, it is a conversion to an ESOP.
The purchase price is based on multiple of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) subject to a confirmation of a business evaluation firm and the bank. No need for employee approval or acceptance.
No risk on losing key employees / personnel.
Loyal employees do not have to worry about losing their job or rank due to new ownership/administration. It is a bonus and opportunity to reward them.
ESOP is tax exempt, federal, and state.
If the company earns a million dollars, they keep a million dollars without payment of taxes regarding capital gains for both federal and state. Now and hereafter, the ESOP shares the profit with the employees (pro rata share).
After Converting to an ESOP, What Is Next?
- ESOP entities enjoy a tax exempt status
- The employees now own and manage the company
- A succession plan of key personnel “Org. chart” going forward
- Employees will earn a percentage ownership of the company, pro rata share
- Vested interest in the company – 1 to 3 years
An ESOP Company Pays No Federal or State Income Taxes
SBA guarantee fee will be waived from February 2021 through September 2021; loan payment will also be deferred as well during this period – act now!