{"ok":true,"canonical_url":"https://dealroom.so/glossary/employee-stock-ownership-plan","api_url":"https://dealroom.so/api/public/glossary/employee-stock-ownership-plan","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"employee-stock-ownership-plan","term":"Employee Stock Ownership Plan","aka":"ESOP","group":"Doing the deal","definition":"An ESOP is an employee benefit plan that gives workers ownership interest in the company. If the business you're buying has an ESOP, it adds complexity to the ownership structure and deal mechanics.","what_it_means":"Acquiring a business with an ESOP requires navigating specific ERISA regulations and valuation methodologies. It can affect how shares are transferred and priced. Ensure your legal and financial advisors have experience with ESOPs to manage the transaction smoothly and avoid unexpected liabilities.","url":"https://dealroom.so/glossary/employee-stock-ownership-plan","official_sources":[],"related":[{"slug":"stock-purchase","term":"Stock purchase","url":"https://dealroom.so/glossary/stock-purchase"},{"slug":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"partnership","term":"Partnership","url":"https://dealroom.so/glossary/partnership"}],"related_questions":[{"question":"When does common ownership by an Employee Stock Ownership Plan (ESOP) trigger affiliation for size determination?","url":"https://dealroom.so/for-lenders/questions/when-does-common-ownership-by-an-employee-stock-ownership-plan-esop-trigger-affiliation-fo"},{"question":"What specific due diligence is required when a 7(a) loan finances a change of ownership where the buyer is a former employee?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-when-a-7-a-loan-finances-a-change-of-ownership-whe"},{"question":"What is the difference between an asset and stock purchase in a buyout?","url":"https://dealroom.so/sba-7a/questions/what-is-the-difference-between-an-asset-and-stock-purchase-in-a-buyout"},{"question":"What if the value of my stock portfolio (for equity injection) drops before closing?","url":"https://dealroom.so/sba-7a/questions/what-if-the-value-of-my-stock-portfolio-for-equity-injection-drops-before-closing"},{"question":"Can an SBA 7(a) loan be used to buy stock or passive investments?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-buy-stock-or-passive-investments"},{"question":"What documentation is required to verify equity injection funds sourced from a personal stock sale?","url":"https://dealroom.so/for-lenders/questions/what-documentation-is-required-to-verify-equity-injection-funds-sourced-from-a-personal-st"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Employee Stock Ownership Plan","url":"https://dealroom.so/glossary/employee-stock-ownership-plan","source_type":"DealRoom Data"}}