CDE - Community Development Entity
A Community Development Entity (CDE) is a domestic corporation or partnership that
is an intermediary vehicle for the provision of loans, investments, or financial
counseling in Low-Income Communities. Community Development Entities (CDEs) through
a competitive application process. CDEs are financial intermediaries through which
private capital flows from an investor to a qualified business located in a low-income
community. CDEs use their authority to offer tax credits to investors in exchange
for equity in the CDE. Using the capital from these equity investments, CDEs can
make loans and investments to businesses operating in low-income communities on
better rates and terms and more flexible features than the market.
QEI – Qualified Equity Investment
A Qualified Equity Investment is an investment made into a CDE to provide cash for
either stock in a corporation or a capital interest in a partnership in exchange
for tax credits.
QLICI – Qualified
A Qualified Low-Income Community Investment. Any capital or equity investment in,
or loan to, a Qualified Active Low-income Community Business (QALICB)
QALICB- Qualified Low-income Community Business
A Qualified Active Low-income Community Business is any corporation (including a
non-profit corporation) or partnership engaged in the active conduct of a qualified
business in a low-income community meeting standards pertaining to gross income,
use of property, and services performed. In most cases, an entity formed to own
real estate in a low-income community will meet the standards for a QALICB.