Employee Stock Ownership Plan ("ESOP") Financing

Monroe’s ESOP lending efforts are designed to provide financing solutions for middle market companies either looking to finance an initial ESOP installation for ownership transition purposes or existing ESOPs in need of capital for operating, acquisition or repurchase obligation purposes. Specifically, Monroe provides cash flow and enterprise value based senior and junior/mezzanine debt and equity co-investments and can arrange senior credit facilities from $5 million to $100 million and above. As one of the only dedicated middle market ESOP debt funds established in the market, we offer flexible financing solutions for ESOPs and are known for our ability to close in a timely and efficient manner.

Investment Criteria

Monroe offers unitranche financings, senior loans, cash flow and enterprise based term loans, acquisition facilities, mezzanine debt, second lien or last-out loans and equity co-investments to borrowers with the following characteristics:

  • Minimum EBITDA of $3 million
  • Experienced management team with a successful track record through multiple 
    economic cycles
  • Predictable cash flows and strong market dynamics
  • Strong customer relationships and distinct competitive advantages
  • Demonstrated growth strategy

Investment Structure

We understand the complexities of ESOP transactions and the financing flexibility that is often required to implement an ESOP structure that accomplishes the sellers’ objectives while best positioning the company for continued growth and success. Accordingly, our financing solutions include first and second lien senior secured debt; subordinated, mezzanine debt with warrants; and in limited situations, preferred and common equity. Our financing structures generally possess the following attributes:

  • Flexible maturities, typically 3 to 5 years
  • Flexible interest-only periods and amortization schedules
  • Current cash interest requirements

For more information on ESOP Lending, contact:

Tom Aronson
Managing Director & Principal