The project I invested in provides investors with a 0.005% return during a 5-year loan term. The PPM provides for redeployment, which will be needed as myself and many of the investors in the project are from China. The PPM does not, however, state whether or not I will receive any interest payments during the redeployment period. Should I expect to receive interest payments? What type of interest rates should investors expect to receive?
Interest rate terms for EB-5 investors vary from project to project. You will need to work with the regional center and your attorney to gain further insight on the interest rates paid to you during the redeployment period.
In order for the capital to be considered at risk (it must remain at risk during the conditional period), it must potentially be subject to both gain and loss. You should contact the regional center directly regarding your question and you should expect to receive something in writing disclosing the potential gain and risk of loss in your redeployed capital. If you do not receive an answer or the answer is not satisfactory, you should retain at attorney who can represent you and protect your rights, immigration and otherwise.
This is information that should have been provided to you. There is no set rate for interest payments for EB-5 projects. They vary. You should definitely check with project/regional center management.
In terms of the interest the investors should expect to receive for capital that is required to be redeployed for perhaps some significant period of time, normally you would refer to the terms and conditions as set forth in the Private Placement Memorandum. If it is silent, there would be a presumption that the investors would receive at least the same return on their investment as they did initially. There is no reason to believe that you would necessarily receive a higher return on your investment, but again that depends upon the project developer and the relevant documentation.
Advisably, consult an attorney to review your PPM. Typically, investors whose money is being redeployed should expect to receive interest payments for the redeployment. In a similar situation, the interest rates are likely to be what is usually paid which is something like between 0.005% and 1%.
You will need to direct these questions to the Regional Center.
Every project is different so you need to check with the project itself. You are entitled to this information.
Many of the redeployed investments call for higher interest rates. However, it will depend on the negotiated terms of the 2nd round of the loan, which will not materialize until the initial loan is close to maturity and ready to be redeployed.
You would need to check with the GP what the return is on the redeployed funds.
DISCLAIMER: the information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal, immigration, and financial experts prior to participating in the EB-5 program. Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public: do not include confidential information in your question.