My dad obtained an unsecured loan from a bank and gave me the proceeds to invest in an EB-5 project. Will the unsecured loan cause any problems with USCIS? What are our options if the loan cannot be used?
A gift or collateralized loan will be fine. An uncollateralized loan may cause problems. It is hard to say without seeing the agreement. But the bona fides of the loan may be questioned.
It will cause problems with USCIS. I think the panel has good answers to your question already.
The gift to you from your father is okay, but USCIS will want proof that the funds your father gifted to you were lawfully obtained. Using an unsecured loan may present a problem because USCIS wants to make sure that the capital you are investing is truly at risk. If the loan is unsecured, USCIS will have a lot questions about why any bank or other lender would make an unsecured loan since it would assume a tremendous amount of risk. There will be a credibility issue and USCIS may doubt that it is a legitimate loan arrangement. It might be better and easier to seek a different source of funds, if possible.
When a gift is used to fund the investment, USCIS will want to know from the donor the source of funds. Your father would have to explain the nature of the loan. That it is unsecured should not be of concern to USCIS.
Based upon the facts you present, current USCIS policy, and remarks at stakeholders' meetings, it would be advisable for your father to gift the funds to you. The unsecured loan to your father should not be an issue, but your father has to show the financial ability to pay back the loan.
The unsecured loan cannot be used for EB-5 investment. U.S. immigration law requires the indebtedness to be secured by assets owned by the immigrant investor in order to qualify as capital for EB-5 purposes. It is actually rare for a commercial bank to issue a loan without demanding collateral. In this situation, you will need to find alternative method of funding.
USCIS does not permit unsecured loans to be used for EB-5 investment purposes. You should consider a different source of capital, or to secure the loan with personal assets.
Unsecured loans often cause difficulty for EB-5 investors. However, as long as your father can show that this is a genuine loan transaction - even if unsecured - there is no reason why it cannot be used to finance an EB-5 investment. He would have to make an unconditional gift to you of the funds. In order to be properly advised you should consult an experienced EB 5 attorney about the specifics of your case.
Unsecured loans CANNOT be used for EB-5 investment. Loans must be secured with real assets. For example, if a petitioner takes a loan for EB-5 investment, it must have collateral based on undistributed profits from their company, a completely purchased property, securities, etc. You can modify the loan so that it becomes secured to some real asset. However, you will have to do a source of fund for the asset you are securing the loan for. For more complicated strategy, you should consult with an attorney to see what the options are for your individual circumstance.
As long as he gave you the money as a gift, it should be OK.
The unsecured loan obtained by your father which your father gave to you would constitute a gift to you (unless your father placed conditions on the transfer to you). If treated as a gift, and you can document the basis of the loan your father obtained from the bank, you should be able to use those monies to qualify for the EB-5 immigrant visa.
Only loans secured on assets can be used to make an EB-5 investment. Unsecured loans are not allowed.
Unsecured loans may not be accepted outright by USCIS unless you can show through documentation and terms that it is indeed a real loan, and a loan in name only. Please consult with an EB-5 immigration attorney to assist you with the complex authentication of source of funds process.
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