Am I required to prove lawful source of a loan from relatives if it was already paid back before initiating my EB-5 process? - EB5Investors.com

Am I required to prove lawful source of a loan from relatives if it was already paid back before initiating my EB-5 process?

If loan proceeds are part of the required EB-5 capital, would I need my relatives to prove that the loan amount came from a lawful source? But what if I’ve already gained profits from another venture with that loan amount being part of the seed money for this specific venture, and I have already returned the loan plus interest to them and am only using the profits from that venture as investment capital towards EB-5, will I still require information from my relatives about that loan, or is proving just the venture profits enough?

Answers

Bernard P Wolfsdorf

Bernard P Wolfsdorf

Immigration Attorneys
Answered on

If you can show you had a loan from your relatives that you successfully invested there is a chance you may not have to do a full source of funds from them, but it is likely you will have to show some of their source documents.

Phuong Le

Phuong Le

Immigration Attorneys
Answered on

You will have to prove that the initial source was lawful too (family loan). Otherwise, nobody would have to prove the source if they repaid the initial loan.

Linda Liang

Linda Liang

Immigration Attorneys
Answered on

The short answer is yes. You said you made the EB-5 investment from a venture with the loan you received from your relative, correct? So the funds for EB-5 came from the venture or from your personal account? The matter is about tracing. If your trace shows that your money is from the venture, you will have to show your loan to the venture, your agreement with the venture and the loan you have from your relative. On top of that, you have to show that your relative obtained the fund legally.

Lynne Feldman

Lynne Feldman

Immigration Attorneys
Answered on

Potentially, this could be required.

Belma Demirovic Chinchoy

Belma Demirovic Chinchoy

Immigration Attorneys
Answered on

Let me begin by saying the most accurate answer is: it depends. It depends on when it happened and what the "venture" is among other things. But to add some color on this answer, consider the following: Relatives, Loan, invest in stock ("your venture"), Sell stock for profit and use it for EB-5 and to repay the loan; Yes, you should source the initial loan from the relatives.

Relatives, Loan, invest in an operating business ("your venture") with income/profits from the business (which continues to be operational) used for EB-5 and to repay the loan. No, in that scenario you probably do not need to source the initial loan from the relatives.

Relatives, Loan, invest in a real estate asset ("your venture") Sell real estate for profit and use it for EB-5 to repay the loan. Yes, you need to source the initial loan from the relatives.

Fredrick W Voigtmann

Fredrick W Voigtmann

Immigration Attorneys
Answered on

If the loan came from a bank or financial institution, it is unlikely the USCIS will want to see the proof of funds for the loan. If the loan was secured by collateral, you will have to show the lawful source of funds to acquire the collateral in the first place. If the loan was made by a private person or company not licensed as a lender, then the USCIS will ask for the lawful source of the loaned funds.

Stephen Berman

Stephen Berman

Immigration Attorneys
Answered on

Yes, you still need to show the lawful source of the loan.

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