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How can ESOPs be leveraged by employers?

employers ESOPs leveraged
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How can ESOPs be leveraged by employers?

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In some cases, a company may leverage the ESOP by borrowing money to purchase shares of stock. Loans may be structured in various ways, but are typically secured by the company or majority shareholders. Employers then repay the load through tax deductible contributions to the ESOP. Traditional profit sharing plans do not offer provisions for loans.

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