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Office of Financial Assistance | Resources

What is the Employee Trusts Program?

The Employee Trusts program is designed to provide financial assistance to Employee Stock Ownership Plans. The employee trust must be part of a plan sponsored by the employer company and qualified under regulations set by either the Internal Revenue Service Code (as an Employee Stock Ownership Plan, or ESOP) or the Department of Labor (the Employee Retirement Income Security Act, or ERISA). Applicants covered by the ERISA regulations must also secure an exemption from the Department of Labor for regulations prohibiting certain loan transactions.


The SBA can assist qualified employee trusts that meet the requirements and conditions for an Employee Stock Ownership Plan (ESOP) as prescribed in all applicable IRS, Treasury, and Department of Labor regulations. Your small business must provide all the funds needed to collaterize and repay the loan. A qualified employee trust may:

  • Re-lend proceeds to the employer by purchasing qualified employer securities

  • Purchase a controlling interest in the employer

Loan Amounts for Employee Trusts

A maximum loan amount of $2 million has been established for 7(a) loans. However, the maximum dollar amount the SBA can guarantee is generally $1.5 million. Small loans carry a maximum guaranty of 85 percent. Loans are considered small if the gross loan amount is $150,000 or less. For loans greater than $150,000, the maximum guaranty is 75 percent.  The Recovery Act temporarily increases guaranty percentages on most 7(a) loans to up to 90 percent through the end of the calendar year 2010, or until appropriated funds are exhausted, whichever comes first.