Leveraged ESOPs

Leveraged ESOPs (Employee Stock Ownership Plans) enable a company to borrow money to buy its own shares, which are then allocated to employees as ownership. The company uses future profits or cash flows to pay back the loan, creating a method for employees to share in the company's growth and value. Essentially, it’s a way for employees to become partial owners of the company through borrowed funds, aligning their interests with company performance, while the company manages the debt through its ongoing operations.