Why does USCIS state that EB-5 “investment capital cannot be borrowed?”

There is obviously some confusion. Investment capital can have been borrowed. Capital means cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. Thus, investment capital can be borrowed so long as the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness.

Investment funds may be in the form of a secured loan secured by the property of an investor (may not be secured by the property of a business entity receiving EB-5 funds).

Funds can be borrowed, but you must be personally liable and have sufficient assets to cover the loan so that the guarantee is not less than 100 percent coverage.

Investment capital cannot be based on an unsecured loan, but it can be based on a secured loan secured by property of the investor. It can also be a gift.

The U.S. immigration regulations state that the personal investment cannot be based upon borrowed funds when the assets of the U.S. business are used as collateral for the borrowed funds to the investor.

The loan has to be structured properly and actually be a loan. Sometimes, business owners will "loan" money from the company to themselves, but without any actual obligation to pay it back.

EB-5 funds may come from a secured loan. The money must be secured on collateral. A gift is permissible; however, USCIS would not accept an arrangement where you "borrow" money from a relative for your investment. In this instance, it would not be a loan secured on collateral.

EB-5 investment funds can be borrowed/from a loan. However, USCIS wants a security interest with the loan and that security can not be the EB-5 business. Also, the loan is supposed to be paid off in two years.

The regulatory definition of "capital" is sufficiently broad that it includes not only such things of value as cash, equipment, and other tangible property, but it can also include the immigrant investor''s promise to pay (a promissory note), as long as the promise is secured by assets the immigrant investor owns, the immigrant investor is liable for the debt, and the assets of the immigrant investor do not for this purpose include assets of the company in which the immigrant is investing. If the person borrowing the money to invest in EB-5 does not have the income or assets that could be used as collateral for the loan to be able to show that he/she has the ability to pay back the loan, then perhaps there will still be an issue of whether the investor''s source of funds could be proven. Proving source of funds in order to have a successful EB-5 case is specific and individual to the circumstances of each investor. You should consult with an experienced EB-5 attorney to discuss your particular situation and how, why and from whom you are obtaining the loan so that the source of fund could be tracked and proven properly.

First of all, statements on the USCIS website, or any other website, do not constitute the law and regulations governing EB-5. The meaning of that language probably is that the investment capital cannot be borrowed and secured by the assets of the new commercial enterprise into which the capital is being invested. Just above that note on the website, it talks about "indebtedness secured by assets owned by the alien entrepreneur" as qualifying for EB-5 investment. It is a bit confusing. You should consult with an experienced EB-5 immigration attorney who can advise you on specific requirements pertaining to your situation.

The investment funds may be borrowed if they are secured by property belonging to the investor. You should see your attorney to discuss this distinction.

It cannot be borrowed.