Monday, September 10, 2018

How Retirement of Baby Boomer Business Owners Will Affect Employees

The Washington Post recently published an interesting article considering the implications of retirement of business owners on employees. What a ‘silver tsunami’ of retiring Baby Boomer business owners could mean for their workers  focuses on the implication of "the wave of retiring Boomers who own closely held private businesses. They will need to sell their companies, transition them to a new generation of owners -- or risk shutting them down, cutting jobs in the process."

The article looks at "a little noticed measure in the recently signed defense spending bill aims to address the widening wealth divide between workers and the owners or top executives who manage them. The measure, co-sponsored by Sen. Kirsten Gillibrand (D-N.Y.), is intended to expand financing options and raise awareness for programs that can help employees become partial owners of the companies where they work" which "make[s] it possible for firms to use Small Business Administration loans to finance what’s known as employee stock ownership plans, or ESOPs, an arrangement that can help transfer ownership of the company to employees rather than have to find a suitable buyer or rely on family members who may be ill-suited or unprepared to keep the lights on."

According to one expert, this change is a big deal, although the "immediate impact is probably limited to small companies: The SBA loans that can be used are capped at $5 million, though they can be combined with other financing." 

Stay tuned!

https://lawprofessors.typepad.com/elder_law/2018/09/how-retirement-of-baby-boomer-business-owners-will-affect-employees.html

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