Question:
What is the standard for loan repayment? I am looking at EB-5 project information. One project states the EB-5 fund repayment: "with an expectation for loan repayment in 5 years—with a 1 year option." What does this mean?
Answers:
In an EB-5 Regional Center project , the EB-5 rules and policy allow the foreign investors invest in the New Commercial enterprise which is then authorized to loan the funds to the Job Creating Entity. The offering and loan documents will state clearly the exit strategy which may mean the repayment of the loan by the job creating entity to the new commercial enterprise.
For an EB-5 project using a loan model (where the investments are pooled in the new commercial enterprise and loaned to the job creating entity), this looks to be in line with the industry. However, you will want all documents reviewed by qualified US immigration counsel for compliance with USCIS EB-5 rules and regulations. Further, the immigration counsel should coordinate their review with the review of a securities or corporate attorney.