Step 1: Similar to contributions to other retirement plans, the company makes a tax-deductible annual contribution (and dividend, possibly) to the ESOP
Step 2: Immediately after receiving the wire transfer with the annual contribution, the ESOP wires the money to the company as a repayment of the Inside Loan
Step 3: The repayment of a portion of the Inside Loan triggers a proportionate allocation of shares to the accounts of eligible ESOP participants
Step 4: The company can use its enhanced cash flows to service the Outside Loan and the Seller Note
