Salvatore Picataggio
Immigration AttorneyLoans should be secured by personal assets. Work with an immigration attorney to handle all details of your source of funds.
How can I borrow money from a private lender with a commitment to pay with interest and still qualify for an EB-5 visa?
Loans should be secured by personal assets. Work with an immigration attorney to handle all details of your source of funds.
It can be done as long as you fulfill certain factors. First, be ready to provide all necessary documentation that the loan is properly obtained, which essentially means you need to document that the source of your investment fund is legal. Second, you will need to document that you have enough collateral(s) for the loan; in essence, the loan must be secured. Personal assets are acceptable collaterals but no assets of the commercial enterprise you are investing in can be used as collateral. Further, no unsecured loan is acceptable. Third, the loan must be in compliance with the laws of the jurisdiction where it is obtained. Fourth, it needs to be emphasized that EB-5 investment is an investment at-risk, meaning, you can lose the entire investment. Therefore, the loan agreement cannot have any recourse clauses that subject any part of the investment asset to the loan. Fifth, be ready to demonstrate your ability to make repayments for the loan. Also, be prepared to show you will be a viable investor particularly if it appears the loan, whether the $500k or $1 million investment, may raise a concern that you are over-leveraged (or financially over-stretched) to pay the loan. Advisably, consult an EB-5 attorney prior to taking further steps.
If you own an asset and borrow money from a financial institution in which you use the asset as collateral for the loan, the loan funds can be considered your personal funds. The EB-5 requirement is complied with because you are investing your personal funds into the EB-5 project.
A loan must be secured by a collateral (such as real estate) that you as EB-5 investor personally own, which must be of value equal or higher than the loan amount in order to qualify the loan proceeds as EB-5 capital.
For EB-5 purposes, the loan must be secured by your real estate property.
You may borrow money and use a loan to make your EB-5 investment provided that you can show that the loan has been collateralized with a property of equal value.
You would need an executed loan document signed by both parties. If it is a personal loan, you may need to show the source of the lender's funds as well.
The only way to use a loan to make an EB-5 investment is to ensure that it is collateralized by assets that you own.
The private lender should be willing and able to demonstrate their source of funds. Also, the loan has to be fully secured by your personal assets.