Employee ownership sales are typically financed by a combination of the following options:
- External lenders
- Seller financing
- Employee contributions (In most worker co-op EO sales the employees will put up some equity in the form of a buy-in).
Employee ownership sales are typically financed by a combination of the following options:
- External lenders: Banks and other financial institutions are common sources of funding, especially for larger companies. Some specialize in EO transactions;
- Seller financing: The company owner may agree to be paid over time from future company profits;
- Employee contributions: In most worker co-op EO sales the employees will put up some equity in the form of a buy-in though this will almost always be nominal (minority) in the capital stack, and employees do not put up funds typically in ESOP or EOT sales.