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What are the requirements of loaning funds for EB-5 from a non-traditional lender?

I want to take a loan from a small private finance company (not a bank) in India by securing one of my assets. Will USCIS be suspicious about the credibility of the loan if it is not from a traditional bank? If the loan is cleared within a couple of months from the date of the I-526 being filed, do I need to update USCIS about it? Is it possible that USCIS would ask to provide evidence that the loan is still not paid, and if paid, to show the source of funds that are used to pay off the loan?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Loans from non-traditional lenders are not recommended unless the finance company can provide evidence of its financial ability to make the loan, its legality in terms of an enforceable loan contract, and its license to issue such loans. Also, your collateral for the loan will be highly scrutinized and the whole transaction will be under a microscope by USCIS. It is better to work with an experienced EB-5 immigration attorney who can advise you on all of your source of funds options before going this route.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    You would need to provide documentation on the legitimacy of the non-traditional lender as well as all loan documents, in addition to proof of ownership of an asset or assets securing the loan in your name and appraisal of the assets.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    It should work.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    There are no discernible requirements when loaning from non-conventional lender. It is even more difficult to impose a set of criteria on an international private financing entity in India. For the I-526 purposes, ensure that the loan is cleared before the l-526 is filed. This will ensure compliance with I-526 requirements. Otherwise, any filing prior to the investment fund being in place is rather unacceptable. Like any loan in EB-5 circumstances, be ready to document the collateral used for the loan. In addition, you must show that the fund for purchasing or acquiring the collateral itself must be documented to be from a lawful source. All in all, the essence of your documentation is to show that source(s) of your investment fund is/are legal.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    While there is no rule or policy that prohibit the loan from a private lender, USCIS has been questioning many private loans as not legitimate. They seem to be questioning possible money laundering or fair-market value of the assets not being legitimate. If your asset is such that a bank would take it as collateral, I would recommend you obtaining a loan from a banking institution.

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    Robin J Gray

    Immigration Attorney
    Answered on

    Even if the loan is from a non-traditional source, USCIS will want to see the source of funds, including where the private lender obtained the funds. Many investments are made without use of traditional banks, the money needs to be verified. If the loan is cleared prior to the approval of the I-526, you would need to provide proof to USCIS as well as showing the source of funds used to pay off the loan.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    There is no requirement for the lender to be a bank. You can certainly take a loan from a small private finance company in India. As long as the lender is a legitimate finance company there should not be any problem. There is a requirement though that the loan needs to be fully collateralized. Therefore, make sure that the market value of the collateral you intend to use in order to borrow is higher than the nominal value of the loan. If asked, you also need to be able to prove that you used sourceable funds to purchase the collateral you are now using to borrow the funds from your non-traditional lender. This non-traditional lender cannot lend you unsecured funds. If you end up paying off the loan a couple of months after the I-526 is filed, there might not be any issues, but if and when they ask you to document that the loan is still outstanding and you respond that it has been paid off, it is more than likely that they would want to know the source of the money you used to pay off the debt.

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    Charles Foster

    Immigration Attorney
    Answered on

    There is no reason to believe that the USCIS would necessarily be suspicious about the credibility of a loan from a small private finance company even if it's not a traditional bank, provided that you can show that the loan is secured by assets of equal value or at least up to the point of the required investment amount of $500,000 or $1 million. If the loan is paid off prior to the date the I-526 is filed, you do not necessarily need to update the USCIS. It would be somewhat unusual for the USCIS to ask for evidence that the loan is still not paid, assuming that the terms of the loan did not require same during that period of time.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    For EB-5 purposes you will need to show the legal source of funds for the investment amount. If you are obtaining personal financing or a loan from a non-traditional source, you will need to show the legitimacy of the lender organization as well as a fully executed loan document with full terms and conditions, etc.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Any loan needs to be secured by personal assets and include all loan documents. USCIS may want information on the lender if they are not familiar with it.

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