Are short term loans permissible in a leveraged ESOP?

[Guest lawdawg]

Are there any durational requirements for the loan in a leveraged ESOP? For example, can the loan be a one year loan?

[RLL]

lawdawg ---

An ESOP loan must be "primarily" for the benefit of ESOP participants, must be on terms that the ESOP fiduciary determines to satisfy the "arm's-length" standards test, must be for a definite term and must otherwise comply with the 1977 ESOP loan regulations. There is no specific requirement regarding the duration of an ESOP loan....under appropriate circumstances a one-year loan would be acceptable.

[Guest lawdawg]

Thanks, my research supports the same conclusion. I just wanted to double check and make sure I wasn't overlooking anything important.