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What is a Community Economic Development Investment Fund?

What is a Community Economic Development Investment Fund?. A company or co-operative set up to raise capital to invest in a business or businesses (1 or more) Must have at least six directors from the community A CEDIF will generally operate under one of the following scenarios:

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What is a Community Economic Development Investment Fund?

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  1. What is a Community Economic Development Investment Fund? • A company or co-operative set up to raise capital to invest in a business or businesses (1 or more) • Must have at least six directors from the community • A CEDIF will generally operate under one of the following scenarios: • Direct investment in or operation a local business • Flow-through investment into one or more businesses • A “blind pool” whereby investors do not know where their investment dollars will go at time of investing in the CEDIF

  2. CEDIF ProgramWhy was it developed? Access to Capital: Alternatives for NS companies to access capital Invest at Home: An option for investors to invest in Nova Scotia companies. Capital Retention: Direct the savings of Nova Scotians to Nova Scotia companies and communities

  3. CEDIF ProgramAdvantages to Investors 30% personal, Nova Scotia tax credit based on the amount invested in CEDIF Maximum annual tax credit now $15,000 ($50,000 investment); was $9,000/ $30,000 20% Provincial guarantee (outside HRM) Credit may be carried back three years and forward seven years Opportunity to invest in local businesses

  4. CEDIF ProgramSteps to Forming a CEDIF • Prepare initial documentation • Review by OED - suitable to offer as a CEDIF • Offering Document with necessary attachments: • outlines what the investor is buying • details who is making the shares available • value of the offering and how funds will be invested • Full & plain disclosure • Raise capital, close offering make investment

  5. CEDIFs Piece of the Capital Pie Currently: 2010: Number of Funds: 27 50 Capitalization: ~$16.5 million $50m Investors: ~2,500 5,000 2004 investment: $3.3 million $10m growth 20% annually *Assuming no material changes to the program or the environment, growth of 20% annually would grow the annual raise by CEDIF’s to $10 million, or 20% of the target of $50m/year in 2010

  6. More information Chris Payne NS Office of Economic Development (tel) 902-424-1259 (cell) 902-430-6469 Email: paynecj@gov.ns.ca Website: www.gov.ns.ca/econ/cedif

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