EP9 - ESOPs and The Economy - Interview with Chris Cucci - Climate First Bank

In this episode the podcast discusses the recent uncertainty with the economy and how this effects the ESOP world. Considering this, the podcast interviews senior level banker Chris Cucci with Climate First Bank. Chris’ bank does financing for ESOP deals all over the United States, providing valuable perspective on ESOP financing credit decisions in light of the first quarter of 2025. While the future of recent economic events in unpredictable, the important take away from this episode is to build your ESOP around the ability to flex with any changes in the economy. 

Transcript

[0:09] Hey everybody this is the journey to an ESOP and beyond our podcast on Employee Stock ownership plans so whether you're considering doing an employee stock ownership plan. Um and are thinking about it or you already are an ESOP and there are things happening in your company this podcast is really a resource to help, work through all of the different types of topics concerns that come about and so uh thank you for listening today and as we go into the topic today we're going to get to interview Chris coochie with climate First Bank and Chris has been a great partner um done a lot of different things in the ESOP space um really just a wonderful you know part of of what we're seeing as a company or a bank willing and committed to helping Employee Stock ownership plans and different employee owned companies um and a lot of different ways so Chris welcome to the podcast this morning we appreciate your time and and your ability to kind of just be on and talk through some of these issues. Yeah thanks good to be here good to see you guys again.

[1:07] Cool so Chris um as we as we bring you in I know you've been on the show before um just real quick just just so everybody knows kind of who you are um what is your favorite movie and and tell us like why.

[1:22] Yeah so uh last time I was on I talked about what's probably my 1 of my favorite movies which was Young Frankenstein Mel Brooks and um so I'll switch it up this time I'll name another 1. Uh just happened to see this 1 recently um I've seen it a million times but and actually it's relevant because it's a business school movie.

[1:43] Uh back to school Rodney Dangerfield another classic um I forgot how good it was and it's I. That was a good that was funny because you know yeah so he's super rich his kids going to college and he buys his kid a bunch of stuff and spoils them, so yeah so why is the school with them because you like funny movies is that why, I do I do I like I what I've realized there's like this uh genre that I I don't think it exists today I haven't seen it in a while but just stupid movies with plots that are completely unbelievable, um there was a lot of those in like the 80s for some reason where the plot is just makes no sense at all it would never actually happen um, but they're hilarious and you have a comedian as the main character um I feel like that kind of I think the last time I saw that was maybe like the Will Ferrell era like Step Brothers and stuff and I uh Jim Carrey maybe but uh we haven't had those in a while I feel like the world could use some really. Dumb movies with a uh comedian in the leading part.

[2:40] Which is a great segue to our topic so the topic today is about the economy and and just the changes within what we've seen from the very beginning of the year now to to now, um as it relates to esops and what we wanted to talk today about is just kind of a general overview of of kind of what we're all seeing in the economy and also kind of just. Um should this be a. In like a a barrier to doing an ESOP or this should this be a problem or that kind of thing so we want to kind of just talk about what what's going on a little bit and, um and then just think about it from from a multiple perspectives and of course from a lender's perspective, um you know there's a lot of things you guys have to be considering because I guess you know my opinion in everything is that you never get paid by your historical cash flow even though you underwrite that way. You get paid by Future cash flows right. And I got my a shirt on today so um so that so when we talk about that so um as we start off let me just kind of say. Frame this out this way so from from.

[3:44] Our perspective there's been a lot of like not perspective but reality of of everything that we're seeing been a lot of different changes very quickly right so so from you know tariffs to immigration to um just the the federal workers and stuff like that um. What what do you what's your kind of take Chris just kind of in general about like what's happening um in the economy and just kind of how you're seeing it.

[4:08] Um so what I would say is that people and the business World especially um tend to likepredictability um, and the challenge we've had recently is there that's kind of gone out the window so right now people just it's hard for people to forecast out. And know where things are going to be and 6 months 12 months 2 years um. That's a that's a challenge right now that that's something I think that has become that challenge has um.

[4:39] Uh grown over the last decade maybe you know it started this thing you could go back 30 years and say it started with 24-hour news cycles and then social media it's created this very reactive world now every day we're like. The stock market swings so heavy um based on emotion and and based on how people are perceiving what they're seeing on the news or on Facebook or whatever um so that creates a tricky environment. On like a micro level but I think when you zoom out and start to look at things on a more annualized or multi-year uh uh perspective. You see that things are maybe not quite as volatile as they appear if you're St it's the same same concept as like someone who opens their first brokerage account right if you look at your 401k every single day you're going to drive yourself crazy um so you look at it like quarterly or annually and you feel better uh feel like we almost have to do that right now with some of the news and that that doesn't mean you can't put your blinders on you have to watch it have to know what's going on and what, new policy is coming from the administration or elsewhere um but I feel like we have to take it in small doses and realize that um an announcement, a tweet doesn't necessarily mean a um you know a shift in policy that's going to be permanent or that may you know will even come to fruition.

[5:54] No good good point uh Jason what's your perspective on all.

[5:59] I think that that's a a really good way to articulate that, we don't have to perceive volatility uh in the in the short term and that the underlying elements of not just the economy but the the. The structures in place in Washington and within your your business over a longer period of time are not going away uh there there might be change but that change is probably closer to to glacial uh than it is overnight in certain elements especially with his robust as the economy is um and it's a good reminder, to think about uh the the time frame and its impact on timing or its lack of impact on timing for for your own decisions.

[6:49] Yeah I mean I think that I think that part of this. The purpose of doing this today in my head was just to kind of throw some reasonableness around the idea that people can become um a little panicked over some things and even thinking about like, what Panic can lead to write and it can lead to some bad decisions you know whether it be your transitioning your company to an ESOP and you're like not doing it only because you're not sure what's going to happen I get that and that that might make sense but you know but panicking to be like I'm not going to you know invest money this year because I'm waiting for the for this thing to all kind of balance out um the core elements as we think about you know the economy and policy, um haven't really changed it's just been a lot a lot of media reporting on a lot a lot of things that um nobody really understands kind of the the.

[7:44] The the time period and then and what's actually going to happen right so there's a lot of like, threats here like let's do this let's do that and so if we all react to it so quickly it just becomes um difficult for anybody to do business when you get down to it um my biggest concern originally was like oh man they're gonna. For us into a recession you know we talked about like the Big R word right. Because it's like an overreaction to that right when you don't even we don't really aim and have 1 when you get down to the the basic you know element so so 1 of the things I wanted to kind of throw out as a question for the for the 3 of us is like.

[8:19] What are you seeing in the economy with your with the clients that you're working with.

[8:25] In terms of how their how their reacting from a business perspective and of course this is kind of the. An ESOP podcast so and you know obviously ESOP companies and you know or companies converting to esops so what are you seeing in general from your perspective Chris.

[8:41] Um I would say that I think it's um.

[8:44] It really is based on industry based on sector so there are certainly certain sectors right now that are. But uh an ESOP companies I deal with are a great example um there are sectors that are being impacted either. Materially impacted um like something like Government Contracting where they have actually seen a maybe a pause or slow slow payments as some of the. Doge stuff is happening you know um and that seems to now slowly start to be correcting itself um. You know the other thing though it would be what I I would say is not a material uh. Issue yet it's it's some it's a perceived issue but probably 1 that will come to fruition and become material like tariffs the impact of tariffs um so a lot of I'm in Florida uh. It was Jason is student and um a lot of our economy is based on construction and development in Florida um materials are. Coming in from other countries cost of those materials. Forecasted to go up is enough to slow down some development or their their at least pausing and saying hey. Before we break ground on this project let's find out what the real costs are because they may look very different. 6 months from now than they do today and you know you don't you don't order everything you need for a big construction project on day 1 you're kind of ordering it in stages so they have to be mindful of that so I think that those are the you know the types of things you see it's more on that. Industry level.

[10:14] Yeah which which obviously there's there's different things that affect different types of companies and different Industries and geographically right so based on sure. We did have a um a client looking at the immigration issues and how that might affect their construction business as well because of the that um so from a, real data standpoint I haven't really seen from my perspective I haven't really seen a Slowdown in say the number of deals in fact I think it's more and more we're seeing more and more companies looking at an employee stock ownership plan than we did last year you know so um I don't think people. In general our overly concerned about some of the changes it's just like you said the timing and even like with the government contractors kind of like letting this thing work through its process to get to you know something to the other side of it so.

[11:04] Write well and to your so. You know you guys are the ESOP experts so I'll defer to you on this but just just I listen to you a lot and I'm on your I'm on calls with you a lot with people and I think that 1 thing I've learned is this is not a um. My decision from the deciding that they want to go forward with ESOP after exploring all the different ways to um transition business uh you know through some kind of succession plan um, to actually closing on that transaction that can be a long process right it takes a while it's not overnight um so to make a decision like that, based on these micro day-to-day things that are happening is not the right decision either right you're so you should be making that decision based on looking out 5 years ten years I think you know a lot of times the the full exit is somewhere between that 5 and 10 year mark for a seller um. You know so they should be like taking that long-term Horizon approach is is my take on that uh if they're if they're looking at the micro every day that's that's really not the right approach for an ESOP transaction.

[12:08] Yeah I think it's a good that's a good point and going into like some of the things that happened with an ESOP deal is is sometimes we get fixated on cash flow for like this 12 say the 12 trillion months of cash flow like that that becomes and I think part of the marketplace in the m&a world is that TTM is very big a big deal right but in a in an ESOP transaction we're really more going to, geared towards average cash flowsand like from your perspective it as things smooth out alright we're back to kind of normal you know things if you just start looking at 5 year averages going forward or 5 year average is going back and so there's there's definitely not as much for an ESOP perspective not as much overreaction to 1 you know 1 series of of cash flows basically that could have been impacted by some of the things that have changed recently so I don't know Jason from your perspective how do you see that.

[12:59] Uh if you look ahead right and I you have to consider where where everyone starts and and where they are you be foolish not to think about what may be impacting in the long run based on what you're hearing today and that's where that that overreaction could come from and, and thinking about you know what's going to happen today or tomorrow. And that that Horizon of of 5 years you have the your your kind of proposed exit, timeline uh that's ahead of you that you can keep pushing forwardbut as an individual or as as an owner, uh and we've been talking about the silver tsunami or great wealth transfer for the better part of a decade now uh you're you're continually moving forward in time and so at some point that that that end is is going to be there and you're going to run into it and I think Chris with whatyour um. What you're talking about is have the longer term view take into consideration things that that do have some some impact or magnitude on on your business um but that that smoothing out of we we incorporate.

[14:08] The the future whether it's your future and Company's future in in the approach will help smooth that out I I saw a short um uh with my kids the other day on um this this guy buying cryptocurrency right and just talking to his roommate on oh I bought crypto and he was like you know how do you do that it's like a you know hundred thousand dollars and then like he gets a a ding on his phone, and it's like ah it fell to 75,000 I'm getting out and the guy's like I'm not no don't sell uh and he was like oh I sold he's like you just lost 25,000 and he gets another 1 it's back up to 90 I'm going to get in, and it it's like the worst possible decision that he could make at every every game that comes on is on his phone. And rather than looking at okay if if I was going to get in I I should get it if I'm going to make a decision I should think about a longer view I shouldn't react based on just, cross today uh because that's not reality uh unless unless you act on it in that short time frame but first to your point. Start now start thinking sooner about what you you want that, the exit the transaction the transition your vision all of those pieces together what what you want it to be to to give yourself room to breathe as all of those things come across your phone from the news and and from work and from everywhere else that that's going to include that decision.

[15:32] Can I ask you guys a question because I'm curious now and got 2 2 people who know this stuff better than me on the call on the uh. Session here so um do you think you're going to see more. People looking at partial esops versus 100% esops given the uncertainty. Trigger that is that something or is it is it really separate from is that decision separate from external economic factorsI have my view but Phil. No yeah I think that it's a good I'm glad you asked me a question um or ask a question but the point is is that I had written down in our discussion notes that we were having um. I would I just call it chips off the table you know and and the idea is that you're we are seeing more partially esops we are seeing moresay younger you know individuals that own businesses whether they be singularly owned by 1 share or multiple shareholders say hey look this is a good time to just kind of start to strengthen the business but and get chips off the table but at the same time.

[16:35] Build my employees into the into the into the business you know and and some of this comes from I think just the idea that they start they're starting to become more and more aware. Of of their options um so I think sometimes people come to us after they've gone through conversations with m&a advisors and looked at private Equity or they've looked at different you know options and they're like, this is going to be a great way, to transition to where we are now to maybe something else without having an ESOP perspective here without having like um. Totally put ourselves in in 1 in 1 area like we can't do anything else with this business afterwards right so it opens the door for future a future acquisition if they want that. You know or they keep selling more and more to the ESOP so there's so the nice thing about that structure on a a partial ESOP is it does open a lot of strategy around the next steps and we're not talking at all about exit planning. That's like the opposite we're actually talking about the ultimate plan to grow the business and build the business into maybe a a bit of a higher level by incorporating the people into the business um from a value perspective.

[17:47] Okay.

[17:49] I share a lot of those same thoughts that Chris also to answer your your question around is it an individual kind of basis and the answer is yes um to to that it it I think anecdotally we we could say we we've seen a lot more interest in partial esops but because the the dynamics of those companies are what Philip said, they're younger folks it's not a matter of I need to get out it's how do we utilize and unlock the power of of our employees to position ourselves for growth, and get everybody rolling in the same direction and awareness is increasing I think there's a high interest from uh for, from owners to to think about how we can strategize with the tool that we have which is equity how do we how do we share equity, how do we use equity as a tool for growth as an engine for growth and when whenever they they Google that or ask someone about that they're going to say oh employee ownership or esops. And then we need to find out more about that um and, so awareness is increasing I think interest is is increasing and uh you know thankfully for from Avenues like this there's there's more information for for those folks to make decisions.

[19:00] Or to incorporate them in their decision-making uh that gets to an ESOP isn't just a way for us to get out it is in the secondary option based on, a different m&a process it's it's on an option of Last Resort it it's a tool for growth and it's it's a strategic tool.

[19:19] Yeah it's helpfulso on your side um Chris I was curious like. You know because some people are brand new to esops and they're also brand new to like looking up financing um walk us through kind of like how how first how climate first like you you guys are different and unique because you're a BC Corp right um why you gravitated to the ESOP you know space as far as being an ESOP lender but then deeper than that like just walk us through a little bit of how you would um, Council people looking at like this is the things that we look at this is our process of approving a credit um and where you guys like. The processes you guys go through to do that and then we'll kind of like layer in from that. The second part of it would be more or less just how does how does what's happened now with the economy changing the way you're you're looking at the credit requests.

[20:09] Sure yeah so uh yeah as you mentioned climate First Bank we formed the bank um June of 2021 so brand new. Uh Chartered Bank headquartered in Florida but doing business all over the country we're lending Nationwide today um, we hit a billion in assets about 2 weeks ago so um small but but rapid growth that's that's a lot of growth for a bank that's just over 3 and a half years old which is exciting um we are we're a public benefit Corporation so we're we're a for-profit company, um but we are registered as a public benefit Corp in Florida we are also a certified bcorp which is um you know not a legal designation but it is a certification that businesses can earn, um any business can earn this of course if they um uh meet certain uh. Primarily uh social and governance uh impact areas within their company a little bit of environmental responsibility too and it just says that your company is based on um you know a bottom line that extends Beyond just profit you have to be profitable number 1 um but additionally that you're doing things that uh you know support a healthier Planet healthier people healthier communities for all of your stakeholders um so you'll hear bcorp people a lot more often uh say stakeholders versus shareholders and stakeholders includes your shareholders your employees uh people in the community that you serve, so you're looking at all of those uh all of those segments of population are important to you as a bcorp um.

[21:38] And uh being a b Corp you know and uh what we call a values based Bank our focus is on loans that do good things for people and for planet um so when we think about.

[21:49] You know planet that that's obvious you know we do a lot of stuff with renewable energy we work with a lot of nonprofits that support um as far as uh marine life Coral all these different things um but then you think about the people side of things. And that can be a lot of things it can be Healthcare it can be providing healthy food. Um you know lower income urban areas or in rural areas that are food deserts uh it could be things related to education um Early Child Development, and then a big 1 is workers how do you support workers um so 1 of the. Uh groups that we associate with is called the Global Alliance for banking on values it's a big Consortium of banks around the world that are saying Hey how do we could do good things with the money we have as a bank um people deposit with us we leverage that and we're able to lend in the marketand 1 of their focus areas was Employee ownership so when we were. Kind of building the bank still in the early phase um you know we saw that and thought we'd love to get into that a couple of us had some experience with it from prior, thanks we had worked for and um so we started uh, doing ESOP and um and we're looking at some worker and co-ops even as well but primarily ESOP is the ownership structure that we focus on it has it obviously much greater tax benefit um.

[23:10] It usually from a lending perspective it's a lot easier to lend to the worker and co-ops are are really interesting there's a lot less because they're not as regulated there's a lot less um definition to them which is hard for you as a bank because you we like. We like definition we like stability you know um so that they become trickier to lend to for that reason but we are open to looking at them they're typically much smaller transactions I would say to the F if you're if you're large enough that your economics support an ESOP I think most people are going to choose to go with the ESOP model because of the tax advantage and the other advantages of it umso looking at, the credit side of things for an ESOP you know the the first conversation usually it can go 2 ways but but I'd say it's 2 things 1 it's a a business we have a relationship withthey're looking at. Um what's going to happen for them in the future they're starting to typically they've talked to, they've gone out to Market already before they talked to us the bank frankly their Banker is usually not the first person they talk to um someone approaches them they probably get a call from a small P shop or something like that um they go down that road.

[24:16] They start to. Get offers and get a feel for maybe what it would look like in terms of monetary compensation and then they start to think about okay so like what happens after the transaction closes what happens to my company happens to my people um.

[24:32] They usually call friends in business people they've known who have done the same thing and based on that feedback they start thinking man is there another way is there another route.

[24:42] They then come to us a lot of the times we're having our we're having conversations with them pretty routinely you know a few times a year sometimes more often than that um. Just catching up on whatever's going on in their business you know and um they'll talk to us about succession we always bring it up.

[25:00] And they'll say something like hey you know I looked at. Private Equity looked at an opportunity to sell on the on the open market and um these are the things I don't like and a lot of the times the things they don't like are related to, the people side it's related to man I yeah I built this name I don't want. This other name to buy it and my my legacy to disappear or I have these employees that have been with me for decades and you know I'd like to see. Something that is more permanent for them I feel like if I sell I'm hearing that you know my company could get downsized or efficiencies built in right you're going to improve the efficiencies which means we're going to fire a bunch of people a lot of the time um. And so that's when we start to have a conversation about ESOP and then the other way which I love is esops come to me because and an ESOP advisor somebody who's working. Representing a company like like you guys do um comes to me and says hey we have a you know a candidate here who's, going to be converting and they're looking for financing option um you know for whatever reason their current bank doesn't want to do it or isn't able to facilitate transaction and or they they just want a second opinion um and that's how the transactions come to us. So usually we start out looking at a uh either financials from the company or a model from an ESOP advisor.

[26:16] Like Berman Hopkins umstart to uh get a initial feel for the company from that, and that's the that's like the quality the quantitative part you know that's that's us really just looking at numbers on a spreadsheet. Then we get to that more qualitative piece which is a conversation having those initial conversations with the um principles that the company and understanding what's driving the transaction why do they want to sell. Um why do they want to do an ESOP you know all of those things uh helped us to really understand the business a little bit more.

[26:46] Yeah sounds good from a pure credit step-by-step process when youover the last I guess several months have you guys. As a bank I and I think you're not you're not a loan committee right you're like a signature or you are a loan committee we are committee yeah. The loan committee pulled everybody together present the credit right and then you get approval have you seen some changes in loan committee with the credit or with the policy changes things like that or you know I think you mentioned government contractors are you know, what's what's been the kind of overall committeefeel you know insideyeah so um I would say there's there's been. There have been reactions to what's going on I wouldn't say it's major changes but um certainly you know the government contractors it's a big 1 because we. With firsthand experienced it right we actually saw payments freeze we experienced um businesses that we work with unable to receive payments or or slowdowns in payments so I don't think we saw that and said hey.

[27:49] Govcon industry is disappearing or anything like that but we did say payments are going to be slow um we as a bank you know we have to. Grade our credits every year we have to assess the credits that we have and risk rate does and then we have examiners who come in and check our work and say yeah you did you did this 1 right or you did this 1 Wrong um. If we're starting to look at either downgrading or or putting you know certain credits on a watch list temporarily because of some slow pay from something like what's what's changed with the the federal Contracting World um. It's really hard for us to rationalize taking on another company in that same line of business at the same time you know when when we're kind of, painting with these broad Strokes I think that that. Goes away over time right does these problems are going to work themselves out I'm confident of that so it's a short-term problem but certainly it's impacting people if if there are people that are coming to us for financing in the short term um you know outside of that 1, situation I think it's no different than any other time you you know this the yes tariffs, are making us they're giving us pause sometimes when we're working with certain types of contractors that we know rely on things like steel or uh Timber you know um, that happened during coid that's happened during other times when we had tariffs or other issues going on in the world so these are.

[29:11] These are the normal I think cyclical things that occur in our economy um. And we're always kind of navigating through those but but more broadly I don't think it's we're seeing a a total slowdown we're still we're actually closing you know more business in the last 3 or 4 months than we have in the history of the bank.

[29:29] That's a good question go ahead Jason on that note you mentioned it. No it kind of in conjunction uh do do you feel like your your clients because of what we experience with coid that may be impacted by by tariffs or changes or slow pays that they've they've kind of Revisited and are able to move a little bit more nimbly in relation to to those changes uh or do you see that you know it's just. That every event is a new event that they have to adjust for is there a blend of those. I think there's a little blend but I think for the most part people came out of coid uh stronger and better write that you got you got through it um. And you know how to navigate that Black Swan event better than you did before and it's the same thing we saw. Um during the Great Recession right the companies that that made it through those companies were were leaner and meaner when they got out and they were they were able to thrive um. So that's. You know that's it's to me it's just life right we and it's you could like in that anything we deal with I mean it's every where there's ups and downs those down times are when we learn the hard lessons um and the people that get through it and get back up are going to be the the ones who uh Thrive when things get good again.

[30:50] 1 1 thought I was having was you know as we think about the next several months or whatever going forward but people ask this question routinely I think is just like. Because it's politics right what so with an ESOP what are the politics related to an ESOP and is it you know are there is the ESOP itself in Jeopardy because of legislation um and just curious so your thoughts on that Chris and I I I've got mine I know Jason's got some some of his butt.

[31:20] Yeah I think um.

[31:22] If you go back historically esops have typically had pretty um bipartisan support right and that's that's a good thing that's, something we always look for in banking are those things that have historically had bipartisan support um. You know this model I think you can say we talked about the social as like my bank looks at this social impact aspect right and we say that it's good for workers it empowers and riches workers um creates a path to wealth for people that may not have had it before, um it's also really good for the seller right I mean the tax benefits for the seller are outstanding the tax benefits for the ESOP. That that exists once that seller has been exited our outstanding so there are. This checks the Box on on business it's helping. The seller the entrepreneur uh immensely it's helping the workers immensely um so I feel like you know if you look at it from those different aspects it's it's hard to argue that anyone is going to zero in on esops as. Um their cause uh you know whether you know whatever political party they're with.

[32:30] Yeah and I all all of those tax benefits from the perspective of Washington or costs um and as we're uh heading into to or in 25 and then the the expiration of the tax cuts and jobs Act. And then uh the administration's kind of promised to address those in in light of of uh what's happening there in in Washingtonum.

[32:58] It it's it creates a line item for that that that budget conversation that budget fight however however you would like to look at it from Washington's perspectiveum however I I I feel uh that, statements around it's good good for the shareholders or owners it's good for the workers it's it's good for the company it's good for the economy are all true and 1 1 of the ways that I like to view an ESOP and ESOP transaction was, monetizing that value for those those shareholders without disrupting the economic benefit of the company that's been producing that Revenue, right so we're we're capturing a value that's being monetized to the individual that's why it's good for them and then they'll get to invest that for for their plan for. Uh for their family for their personal Legacy. While the economic engine continues for wages for all the workers and builds wealth for those same workers Without Really material change. Uh in in the way the operations do with with little disruption if if any.

[34:08] Uh and the power of employee ownership just kind of magnifies that that element of wealth for those individuals. Um and it's not the same as like a company getting bought and then having to go through A disruption of an acquisition of being acquired. And then does that economic value does it get eroded through some of those changes that that you had mentioned earlier their considerations that others go through when they sell to a party uh rather than it being maintained and grown and it's it's hard to encapsulate that in a. Um in a short statement or in a Washington friendly statement but the Tyler's efforts of of our friends at at ESA um and expanding esops that that are talking through how to consider this for for the the the larger, economy at scale uh you know those are ongoing and help to try to get that message across to the people who are looking at it as a budget line it.

[35:04] That's a good point I I would also.

[35:07] I could be this is this is definitely anecdotal but I I would imagine there may be some studies on it but I would assume that the um. Retention of jobs is much greater or even the growth the job growth um for an ESOP company versus a company certainly a company that's sold um you know that typically you're going to see some some downsizing if it's consolidation if it's acquired by a competitor you're certainly going to see some consolidation jobs um job losses occur so there is like this other layer of, um individual taxpayer um that goes away and also you know unemployment numbers increasing um if we continue to see the industry's consolidate versus companies converting to an ESOP would be my my guess.

[35:50] Yeah I I would agree I think that the the success stories are are all over the country in terms of of this model working over and over and over again and um you know obviously there's always a pocket here or there of like hey this wasn't you know maybe structured right because of whatever but overall I think this more success stories than there are that the companies you know outperforming an ESOP companies outperforming and non company employees are staying there longer they're more productive there's more of a future for them and and this is my thought or explanation on not only like.

[36:28] Why the esops are why people are doing more and more esops I mean that's the trend that we're seeing like this is this is all over the country there's no there's no like Geographic, you know particularly Geographic part except for some geographies have more education on esops but other than that we're seeing them pop all over the place and I think politically speakingum bipartisan support.

[36:52] Both sides of the understand that that's a reality and so they did craft legislation that was very successful and there I think they're seeing that as a as a good story to talk about what's working in in our country and this is something that's actually working, um I I've seen and and Jason seen like the more and more expansion of of opportunities, within not only Federal but also from a state perspective and meaning that there are more and more companies aware of this because of the politics because of the good politics and the expansion of that so. Um there was some transition between the prior Administration and the new administration because the basically kind of, said hey Department of Labor was going to give some guidance that got kind of washed away but we're kind of nothing's really, changed in that except it just kind of more flexibility you know because of because of that that transition at the beginning of the year, um but other than that I mean I think it's just continually been an A A positive element of what's happening in the economy um because it does have such strong bipartisan support.

[37:59] So having said all that I think the the main thing I wanted to cover today is just kind of get into like you know just just a perspective on it because I think sometimes it's like people don't talk about this as much um because there has a you know as a political connection here but at the same time, overall I don't I think that this for for everybody involved in the ESOP world um it's going to be 2025 is going to be a great year and I think there there's going to be a lot of success stories um I think the trends at least from my perspective we're seeing as many partially esops as we are just 100% esops. You know which is interesting because you do see people looking at this and and we kind of touched on this a second ago or a few minutes ago looking at this as a great option to grow the business get people involved in it um start now as opposed to when you're you know later down in life in your 60s or 70s get it going now um because there's a lot of opportunity to to build that um so Chris I you you jumping on I think the main thing too just that you covered that I'll kind of summarize sounds like you guys are busier than ever too on the credit side when it comes down to esops, yes yeah navigating through some of the government contractor stuff but other than that nothing's really majorly changed.

[39:18] Yeah now we're happy to talk with anyone right now for sure.

[39:22] Cool so so all of that being said um is there any kind of final advice for people that are thinking through the esops that you guys might have either 1.

[39:36] I would just selfishly I'll say get a second opinion on your financing if you're uh talking to a bank and you know you're talking to your existing Bank definitely get a second opinion you never know what's out there. That's that's a great Point yeah what about you Jason.

[39:51] No Chris thank you for for joining today and for for your perspective I think it's very valuable to to hear how a lot of this aligns around secession and and taking the longer View. Uh and then uh getting getting a second perspective is is always helpful especially as you're considering such an important decision.

[40:11] And my my my only thing would be to finish it would be just to don't overreact to the things that are happening you know don't you know really think about what you're doing do your research um but.

[40:23] You know don't delay something because you feel like you know you know there's. Something gonna happen it's the boogeyman kind of stuff so just do your homework obviously make good business decisions but don't overreact to things as well because that can you know that doesn't create a good business decision but um so other than that and I appreciate you guys um working through this topic today and for everybody else thank you for for listening check out our website at journey to ESOP cam for other episodes and just any questions you might have for anything related to. Esops before you transact or even after you transact so thank you guys so much we'll talk to you later.