Long Point is the leading private equity firm providing ESOP financing. We have made investments in six companies owned 100% by ESOPs. We have the expertise to provide a financing solution to your new or existing ESOP company. We will provide smart junior capital for the following ESOP transactions:
Long Point Capital invests the capital that provides significantly more wealth diversification for a business owner. In a “Traditional ESOP” transaction, a newly established ESOP borrows money through a senior bank loan, and purchases the Company from a business owner for proceeds consisting of cash (generated from the bank loan) and a seller note from the Company. Often, the cash only represents 30% to 40% of the proceeds.
In a private equity backed ESOP transaction (which we call a PE+ESOP Recap), the business owner can receive 80% or more of his proceeds in cash. The chart below shows the wealth diversification generated through a Traditional ESOP transaction, and through a PE+ESOP Recap. If one of your primary goals is wealth diversification, the PE+ESOP Recap allows you to achieve that goal more effectively than a Traditional ESOP. Please review the PDF's provided under "Additional Information/Publications" on this page, for more information.