ESOP Financing

An Employee Stock Ownership Plan (ESOP), is a tax-qualified, defined-contribution employee benefit plan. It's similar to a profit sharing plan, but is designed to invest in employer stock for the benefit of employees, rather than the stock of other companies. An ESOP can also provide substantial tax benefits to your company if you sponsor such a plan.

Implementing a leveraged ESOP can be a complex process that results in a significant change in your company’s balance sheet. Having an experienced lender within the ESOP field to rely on from the initial transaction to long after the last share is released is critical to maintaining your Company’s success. Here are a few other of the advantages to choosing First American:

Experience

For over 20 years, First American Bank has been providing loans to companies nationwide for the purpose of establishing ESOPs. In addition, First American has been represented on the ESOP Association’s finance committee for over 15 years. This allows us to be on the front end of all new lending trends and ESOP regulations assuring you of being in the best loan structure possible for your business.

Knowledge

Our years of experience have given us a comprehensive knowledge of the ESOP process, so we can help you take advantage of tax benefits, avoid pitfalls, and see to it that the process runs smoothly from beginning to end.

Contacts

First American Bank has extensive contacts within the ESOP community and is a member of both the ESOP Association and the National Center for Employee Ownership (NCEO). This means we can put together a team of specialists with a thorough understanding of all legal and financial aspects of the process.

Flexibility

First American Bank’s owner-management structure empowers us to make decisions quickly. It also allows us the flexibility to tailor an ESOP loan to your cash flow. In fact, our first consideration is the ability of your company’s cash flow to support an ESOP loan.

Middle-Market Focused

Because of our size, First American is well-positioned to finance ESOPs for middle-market businesses at any point in the ESOP process, from the initial funding to the final stages. We have the flexibility to finance transactions between $2 million and $20 million.

If there’s anything we’ve learned during the economic downturn, it’s that every company goes through its ups and downs. Having a bank that treats the relationship as a partnership is critical for navigating through the ebbs and flows of the economy. This is especially important for companies transitioning to an ESOP as there are several new variables that need to be accounted for. At First American Bank we put an emphasis on relationship lending.

 

      

To contact our ESOP Financing Group click here or email esopfinancing@firstambank.com.

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