ESOP FINANCE AND BUY OUT

Hermes Capital Partners is a leader in providing capital for the design and structure of ESOP’s for middle-market Companies. The leveraged (debt financed) Employee Stock Ownership Plan (ESOP) is one of the more difficult of corporate financings to fully understand and accomplish. Many of the so called experts come to Hermes to structure and implement their plans.

The ESOP Benefit can help you better leverage particular situations:

  • To buy the shares of a departing owner.
  • To borrow money at a lower after-tax cost.
  • To create an additional employee benefits.

    • The ESOP Benefit can also help you identify a number of available and significant tax benefits:

  • Contributions of stock are tax-deductible.
  • Cash contributions are deductible.
  • Contributions used to repay a loan the ESOP takes out to buy company shares are tax-deductible.
  • Sellers in a C corporation can get a tax deferral.
  • In S corporations, the percentage of ownership held by the ESOP is not subject to income tax at the federal level (and often the state level as well).
  • Dividends are tax-deductible.
  • Employees pay no tax on the contributions to the ESOP, only the distribution of their accounts, and then at potentially favorable rates.

    • If you are looking to obtain more information in understanding ESOP’s and their advantages, please call us to help you determine the right structure for you.

    Hermes Capital Partners brings the most experienced team of professionals to meet your needs with a collaborative think tank approach to provide answers to your questions and solutions to your problems.

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