How should a non-regional center enterprise arrange its capital stack with EB-5 funding? - EB5Investors.com

How should a non-regional center enterprise arrange its capital stack with EB-5 funding?

Can a non-regional center entity use a traditional loan (like CMBS or SBA) in addition to the EB-5 equity investment? The EB-5 funds will not be used to replace the debt, but as a direct equity investment. The loan would be obtained by the entity (using entity assets as collateral) in which the EB-5 investor is investing. Normally how much of the capital stack should the EB-5 investment occupy versus the traditional loan?

Answers

Bernard P Wolfsdorf

Bernard P Wolfsdorf

Immigration Attorneys
Answered on

Usually only about 25 percent to 30 percent. While some are higher, this is the best model.

Daniel A Zeft

Daniel A Zeft

Immigration Attorneys
Answered on

A new commercial enterprise can receive funds from a direct EB-5 investment and other sources of funding. For a direct EB-5 case, the investment from the EB-5 investor could be a portion of the total funding or the entire amount of the funding could come from the EB-5 investor.

Fredrick W Voigtmann

Fredrick W Voigtmann

Immigration Attorneys
Answered on

The short answer to your question is yes. For a direct EB-5, just like a regional center EB-5, the invested capital can be combined with other equity or debt to round out the total project cost. The EB-5 investors will get the full credit of job creation for the new commercial enterprise. There are no EB-5 regulations or statutory provisions proscribing a certain capital stack or mix of EB-5 investment versus a traditional loan or developer equity.

Charles Foster

Charles Foster

Immigration Attorneys
Answered on

A non-regional center entity may use a traditional loan in addition to the EB-5 equity investment. Normally, the total EB-5 investment should be less than the traditional loan, but that depends upon your prospective EB-5 investors. Many sophisticated EB-5 investors will want to see that the EB-5 project has significant traditional bank financing and the project developer&#39s own equity as well.

Vaughan de Kirby

Vaughan de Kirby

Immigration Attorneys
Answered on

You need to retain an experienced EB-5 attorney who has successfully set up other investment structures or regional centers.

Dale Schwartz

Dale Schwartz

Immigration Attorneys
Answered on

What you propose should be OK.

Blake Harrison

Blake Harrison

Immigration Attorneys
Answered on

You can use multiple sources of capital for direct EB-5 investments. There are not any immigration requirements related to the breakdown of the capital stack.

Belma Demirovic Chinchoy

Belma Demirovic Chinchoy

Immigration Attorneys
Answered on

Yes, you can obtain a loan, including an SBA loan. There is no rule on how much capital can be EB-5 versus other sources; it depends on what your other investors and or lenders will tolerate.

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