WHAT IS AN EQUITY EQUIVALENT (EQ2) INVESTMENT?
Equity Equivalent Investment is a capital product for community development financial institutions (CDFIs) and their investors. Unlike for-profit corporations that can raise equity by issuing stock, nonprofits have traditionally built their capital base through contributions, philanthropic sources or through the accumulation of retained earnings. An EQ2 is a long-term deeply subordinated loan with features that make it function like equity.