The Lendtable Team
May 25, 2022What is an ESPP?
An Employee Stock Purchase Plan, or ESPP for short, is an employer benefit that allows employees of some publicly traded companies to purchase company shares at a discounted rate.
Employees can then sell those discounted shares at full market value (the value that the shares are at “market” price, which are often more expensive) securing a 5-15% profit.
Why is it important to contribute to my company's ESPP?
At Lendtable we want to help make participating in ESPPs accessible to all, so we’ll fund your contributions until you’re able to sell your shares so that you don’t have to feel the month-to-month cost of participation. More on that later!
Benefits of participating in your company’s ESPP
Discounted shares
The most important aspect of an ESPP benefit is the discount or match. This functions as guaranteed profit if you sell your shares at full market value immediately once you receive them.
Some plans even allow employees to choose the lowest share-price during their participation - this is called a lookback clause. This means you not only profit from the discount, but if your stock price goes up you also profit from the increase in the price!
Immediate Financial Profit
The most important ESPP benefit is financial gain. Purchasing shares at a discount or match creates immediate profit for any enrollee.
Long story short - participating in your company ESPP is an easy way to make a quick and reliable return on investment and improve your financial health.
Ownership in your company
Enrolling in your company ESPP allows you to share in the benefit of good company performance. If you believe in the work you and your coworkers are doing, this is a great way to bet on your company's success.
Saving for near-term goals
ESPPs can also help you fund near-term goals. Your rate of return from selling vested ESPP shares as soon as you receive them should be higher than today’s highest-yielding savings accounts.
Saving for retirement
If you earn money from selling your shares, that money can be applied to a Roth IRA or 401k retirement plan and put toward your retirement savings.
I can’t max out my ESPP, how can Lendtable help? My company ESPP is really expensive. Is there another way for me to participate?
Similar to our 401(k)+ service, we replace your ESPP payroll withholdings while you participate in your plan, allowing you to max out your allowed contribution without feeling the month-to-month impact.
Based on our profit-share model, we only earn when you earn. Aside from our $10/mo subscription fee, our ESPP rate is a flat rate of 35% of the profit we help you make. That means that if your shares are offered at a 15% discount, you keep 65% of that 15% profit without using your own funds to get it. If for any reason, you do not receive a profit on your ESPP, we remove our fee entirely.
How can I leverage my ESPP to the fullest?
If your employer is publicly traded and offers a discount or match when you purchase shares, Lendtable will replace your payroll contributions, allowing you to earn a profit without losing your month-to-month cash.
How do I take advantage of my ESPP?
Sign up for Lendtable with your most recent paystub and ESPP policy (if we don’t already have it). Our team will review and approve or deny within 24 hours.
Once approved, review your offer, link your bank information, and sign your contract.
Enroll in your Employer’s ESPP for the maximum contribution amount during your next enrollment period.
Start receiving payouts and contributing to your ESPP:
Starting when your wages are withheld by your employer, Lendtable will deposit your payouts to your linked checking account on the 1st and 15th (or the following business day) of every month.
You’ll pay a subscription fee of $10/mo to use our service.
Each month, we will verify contributions made to your ESPP by requesting that you upload your most recent paystub showing your deductions once a month. You’ll get your first two payouts automatically to allow time for your paycheck to show your deductions.
When your shares are transferred to you by your employer, you sell your shares and pay your Lendtable Balance, securing your profit!
Have more questions? Join us for our upcoming webinars!
