special purpose entity
special-purpose entity. A business established to perform no function other than to develop, own, and operate a large, complex project (usu. called a single-purpose project), esp. so as to limit the number of creditors claiming against the project. • A special-purpose entity provides additional protection for project lenders, which are usu. paid only out of the money generated by the entity’s business, because there will be fewer competing claims for that money and because the entity will be less likely to be forced into bankruptcy. A special-purpose entity will sometimes issue securities instead of just receiving a direct loan. — Abbr. SPE. — Also termed special-purpose vehicle (SPV). See BANKRUPTCY-REMOTE ENTITY; SINGLE-PURPOSE PROJECT ; project financing under FINANCING.
