Indiana State Treasurer Richard Mourdock announced last Thursday a new state program to encourage the formation of Employee Stock Ownership Plans (ESOPs) in the state. The new program, called Indiana’s ESOP Initiative (ICI), will invest up to $50 million in state money in Indiana banks that specifically lower their interest rates in loans made to employee-owned businesses.
Here is the text of the Indiana State Treasurer’s May 8, 2008 press release:
State Treasurer Richard Mourdock announced the designation of $50 million and the launch of IEI for the purpose of assisting Indiana businesses to become ESOP companies, which will preserve Hoosier jobs.
It’s not only critical that the state continues to bring new jobs to Indiana, but it’s absolutely essential that Indiana keeps the jobs it currently has, asserted Treasurer Mourdock. IEI’s mission is to encourage Indiana businesses to become ESOP companies and preserve Hoosier jobs.
Treasurer Mourdock has placed the IEI within the Treasurer of States Office and has created an ESOP toolbox of information regarding current Hoosier ESOP companies, organizations that provide professional services to ESOP companies, and educational materials about ESOP governance.
The $50 million designated for IEI and its mission is set up as a linked-deposit program through the Treasurer of State’s Office. In the ESOP Linked-Deposit Program, the Treasurer of State will purchase certificates of deposit from local financial institutions at reduced rates of interest, and in turn the financial institutions will provide loans at reduced rates of interest to Indiana businesses becoming Hoosier ESOP companies.
The initial rate financial institutions will be charging to Indiana businesses through the ESOP Linked-Deposit Program will be 4.25%. The State of Indiana will not be a guarantor or man any of the risk of default on loans made under this program.
ESOP companies have a track record of creating wealth, encouraging the entrepreneurial spirit, and increasing productivity, explained Treasurer Mourdock. Furthermore, no group of employee-owners has ever, ever, ever, ever moved their company to Mexico or China!
Treasurer Muourdock says that there are slightly more than 200 employee owned businesses in Indiana, and he is hoping to have 20 additional businesses each year become employee owned.
Nothing but net!
Here is the link to the IEI and ESOP Linked-Deposit Program.