Due diligence advisors in the EB-5 field examine all significant issues in an EB-5 project that create risk of green card denial or loss of investor principal. The due diligence analyst will look at such issues as - how realistic is the business plan and the market research upon which the plan is based; what is the investor's position in the capital stack, and what is the order of income and return of funds among debt and equity holders; what is the experience and financial liquidity of the project principals; what happens if the project projections are off by 10%, 20%, and how does this affect investor likelihood of obtaining return of principal, et cetera.
The conduct of advisors in the due diligence field in the United States is very strictly regulated by the U.S. Securities and Exchange Commission. All brokers and advisors providing due diligence advice must appear on the SEC's BrokerCheck online verification system.
The U. S. Financial Regulatory Authority (FINRA) declared in August 2013 that the standard broker financial analysis for private placement investments, formalized in FINRA Rule 2111 and Regulatory Notice 10-22, must be complemented by an evaluation of immigration law and economics issues unique to EB-5 investments. Your advisor or advisory team must therefore have both legal and financial expertise in order to advise about EB-5 investments.