The ESOP Association applauds Rep. Nydia Velazquez (D-NY) and Rep. Steve Chabot (R-OH) for their roles yesterday in introducing and supporting H.R. 5236, the Main Street Employee Ownership Act of 2018. The bill, which was introduced today and approved unanimously by the House Small Business Committee, seeks to redress longstanding inequities in how the Small Business Administration (SBA) administers its loans with respect to Employee Stock Ownership Plans (ESOPs).
“The SBA was authorized to loan to ESOPs in 1979,” said Rep. Velazquez. “Unfortunately, this tool has been rarely used, due to a lack of understanding of the business structure and cumbersome transition requirements.”
Rep. Chabot, the Committee Chair, bolstered H.R. 5236 by adding a chair’s amendment, and also urged other committee members to support the bill.
“H.R. 5236 provides important reforms to how the SBA treats employee owned businesses,” he said during the Committee meeting. “From updating reporting statistics to capturing accurate data, to codifying ownership transition plans, H.R. 5236 will provide clarity to small businesses that truly need it.”
The bill now moves to the full House for consideration.
Rep. Velazquez thanked Rep. Chabot for his support. She also pointed out that she had worked very closely with the office of Sen. Kirsten Gillibrand (D-NY) on supporting employee ownership.
“The support of Rep. Velazquez, Rep. Chabot, and Sen. Gillibrand underscores that ESOPs and employee ownership merit and continue to receive support that is bipartisan and bicameral,” said ESOP Association President J. Michael Keeling. “As Rep. Velazquez noted in her remarks, Baby Boomers own a vast number of businesses in this country, and as those owners prepare to retire, their companies may face uncertain futures. No businesses should shutter, and no employees should lose their jobs, when becoming employee owned is a perfectly sound, well researched, well regarded business option. This bill will make it easier for businesses to pursue that alternative, with help from the SBA.”