Using EB-5 Financing

Using EB-5 Financing

  • EB-5 financing can provide non-recourse, term financing for construction and development of new job creating projects
  • EB-5 Funding is sourced via foreign direct investment in the United States
  • Funding is achieved by raising capital through the offering of securities by way of Private Placements

EB-5 financing can provide non-recourse, term financing, often for a term of five to six years for construction and development of new projects.  This can provide a number of advantages to developers. EB-5 visa regulations do not set any limit on the amount of money that can be raised for a project under the EB-5 program, except the requirement that at least 10 new US jobs must be created for each EB-5 investor within the specified time period.

The sophistication of EB 5 financing has increased dramatically over the last few years and has become a serious alternate funding methodology being used by large real estate developers, private equity funds and large and small corporations in increasingly diverse projects spanning many industries. There are few limitations in the law as to the type of project that can be funded with EB-5 financing, but EB-5 projects tend for the most part to be multi-layered financing and equity structures involving hotels, senior living facilities, multi-family apartment complexes and mixed-used developments, with retail, restaurant and other elements.

EB-5 Funding is sourced via Foreign direct investment in the United States, authorized and regulated under the EB-5 provisions of the United States immigration laws that are structured to assist foreign investors obtain lawful residency (Green Card status).

EB-5 financing is attractive to sponsors/developers that are unable to obtain financing from conventional lenders due to lack of collateral, track record or maybe the nature of a project, however, using EB-5 financing is also a securities financing with inherent complexities such as up-front costs, timing implications and securities considerations which must be taken into account. The principal benefit of EB-5 to a foreign investor and his or her spouse and their unmarried children under the age of 21 is access to obtain U.S. permanent residency.

Prevail Capital aims to align itself with viable EB-5 projects in which both our sponsor-partners and their EB-5 partners can have confidence.