MBO Ventures

Thinking of selling your company? Could an ESOP be the right choice?

MBO is a leader in managing Employee Stock Ownership Plans (ESOP) for companies. The ESOP is a program for distributing equity that holds tremendous tax advantages for both the owners and employees (including next generation family members) where an exit or transfer of ownership is under consideration. ESOPs were designed by Congress to incentivize owners to sell to their employees instead of an outside buyer.

In keeping with our mission of assisting companies large and small with a full spectrum of services, RC Kennedy Consulting, along with our network of supply chain expert partners, will represent MBO Ventures in selling, marketing, and implementing their services.

As a member of our network, it takes just one call for us to connect you with MBO Ventures. Reach out to us at info@rcksc.com.

Highlights of the ESOP program include:

• The buyers (your employees) do not have to raise the capital for the purchase. The ESOP is funded through company loans based on cash flow and/or assets to fund the buyout.

• The government subsidizes these loans. The IRS allows the company to deduct both the principal and interest of the loans to fund the ESOP. Those savings can then be used to pay down the loan.

• Income taxes on the company are reduced or even eliminated.

• The owner receives a payment for the full amount when the ESOP is established. Capital gains tax on the sale can be deferred (indefinitely).

There are many other advantages. Any business owner(s) looking to raise cash or sell their business should consider an ESOP as the mechanism for doing so. As your partner, MBO works with leading banks, like JP Morgan, to structure ESOP programs for their customers. Your first step would be to have MBO do a quick evaluation of the scope and eligibility of your business for an ESOP. From there, MBO will manage the process with the bank to make it all happen. 

MBO’s services are useful for companies big and small. Our partnership with the team at MBO is aligned with the RC Kennedy mission to make tier 1 solutions available to the SMB world.