The objective of this program is to
provide financial assistance to Employee Stock Ownership Plans. The
employee trust must be part of a plan sponsored by the employer company
and qualified under regulations set by either the Internal Revenue
Service Code (as an Employee Stock Ownership Plan or ESOP) or the
Department of Labor (the Employee Retirement Income Security Act or
ERISA). Applicants covered by the ERISA regulations must also secure
an exemption from the Department of Labor regulations prohibiting
certain loan transactions. Loan
Amounts Available for Qualified Employee Trusts Loans
Effective December 22, 2000, a maximum loan amount of $2 million
has been established for 7(a) loans. However, the maximum dollar
amount the SBA can guaranty is generally $1 million. Small loans
carry a maximum guaranty of 85 percent. Loans are considered small
if the gross loan amount is $150,000 or less. For loans greater
than $150,000, the maximum guaranty is 75 percent.
Who is Eligible for a Qualified Employee Trusts Loan?
SBA can assist qualified employee trusts that meet the requirements
and conditions for an Employee Stock Ownership Plan (ESOP) as prescribed
in all applicable IRS, Treasury, and Department of Labor regulations.
The small business must provide all the funds needed to collaterize
and repay the loan. A qualified employee trust may:
• re-lend proceeds to the employer by purchasing qualified
employer securities, or
• purchase a controlling interest in the employer.
SBA Loan Maturities
Interest Rates
Fees
Guaranty Percent
|