Why use an ESOP?

• An ESOP can create a market for a closely held company's stock

• A selling shareholder can finance the sale to the ESOP by accepting a promissory note from the ESOP (the selling shareholder receives market rate interest)

• If a bank is willing, an ESOP can borrow all or portion of the money for the stock purchase

• An ESOP can repay the entire loan with pre-tax dollars (the ESOP sponsor deducts its entire ESOP contribution, principal as well as interest, making the entire ESOP loan repayment tax-deductible).........

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