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Employee Stock Ownership Plans

A collaborative approach to financing and succession planning.

Employee Stock Ownership Plans offer business owners a succession solution and employees an opportunity to participate in the company’s profitability and success. Key combines expertise from across the bank, including financing, commercial banking, wealth management, and employer solutions to make the ESOP transition seamless and beneficial for all parties.

How KeyBank Supports ESOPs

KeyBank supports both share sellers and the employee buyers, beginning with structuring a loan for the business to finance the initial share sale. Key then provides ongoing support for additional share transactions, tax strategies and wealth planning. As always, Key takes a holistic approach to your business, helping you manage your company’s financial needs throughout the ESOP process and after the sale, advising on tax-advantaged and sustainable strategies for your company’s future.

KeyBank ESOP capabilities include:

  • Commercial term loans to finance the initial sale of shares, second-stage transactions, refinancing of seller debt, and repurchase liability
  • Syndicated credits
  • Conventional financing structures
  • Small Business Administration 7A ESOP Product for smaller company ESOP purchases (up to $5,000,000)
  • Asset Based Lending structures
  • Lines of credit to support working capital needs
  • Term debt for equipment, growth capital and acquisitions
  • Personal loans secured by Qualified Replacement Property to enable the IRS § 1042 tax election to defer and eliminate capital gains tax
  • IRA rollover for retiring or departing employees

Consult your own tax advisor regarding applicability of tax related information to your unique tax circumstances.

All credit products are subject to collateral and/or credit approval. SBA loans and products subject to SBA eligibility.

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