EB-5 Loan: Source of Funds


The EB-5 visa offers a unique option to obtain a green card in the United States through an investment, which can be funded through loans.

This guide discusses the EB-5 visa, including its advantages, how EB5 loan and collaterals work, what documents you need, and eligible loan providers.

Understanding the EB-5 Visa Program

Before we dive into the details of using EB5 loan to fund your EB-5 investment, let us first clarify the EB-5 immigrant visa and how it works.

The EB-5 visa program is designed to encourage foreign investors to invest in the U.S., stimulate its economy, and create jobs for U.S. workers in exchange for permanent residency (a green card). It requires investment in a new commercial enterprise or a regional center project.

The required investment ranges from a minimum of $800,000 (if investing in a targeted employment area) to a minimum of $1.05 million (if investing in a non-targeted employment area). Lastly, the investment must create 10 full-time jobs for qualified U.S. workers. Note that the investment amounts are subject to change according to inflation every five years. Ensure you are getting the most accurate information from the USCIS.

The application process starts with a Form I-526 petition, after which you will receive a conditional permanent residency if approved by the USCIS. This gives you two years to maintain your investment and meet the job creation requirement to obtain an unconditional permanent residency through a Form I-829 petition filed 90 days before your conditional permanent residency expires. Once successful, you will receive a green card.

Click here for a more in-depth guide on the EB-5 visa requirements and application process.

Advantages of the EB-5 Visa Program

The EB-5 visa offers various advantages for individuals seeking permanent residency in the United States through an investment. Here are some key advantages:

  • No country restriction

Unlike the E-2 visa, another popular investment option, the EB-5 visa does not rely on treaties. You can apply regardless of your nationality and where you are from.

  • Obtaining a green card and citizenship

The EB-5 visa is an immigrant visa. Thus, it will lead to obtaining a green card or permanent residency, allowing you to live, work, or study in the U.S. permanently.

  • Visa-free access to the U.S. and other countries

A green card entitles you to enter the U.S. without any additional documents at any time. You can also visit Canada and some South American countries visa-free.

  • No sponsor required

Unlike other visas that require sponsors, e.g., L-1 or EB visas, the EB-5 visa does not require you to have a U.S. petitioner. You can self-petition as an investor.

  • No business experience required

The EB-5 visa does not require you to have any specific qualifications. This applies to dependents, too. You only need to meet the program’s requirements, such as having the capital to invest and a sound business plan.

  • No language skills required

You are not obliged to pass any language test to apply or qualify for an EB-5 visa.

  • Career flexibility

You can invest in other businesses or work as you are not tied to a specific job or employer.

EB-5 Loan

Using loans as part of the sources you can use to meet the EB-5 visa program’s minimum investment amount requirement is acceptable. In addition, as the visa applicant, you must be the principal borrower of the EB-5 loan and personally liable for its repayment.

Regardless of how you acquire your loan, you must prepare substantial documentation to trace it and ensure it is lawfully obtained.

For instance, you will need a written EB-5 loan agreement, the lender’s income tax returns, and evidence of how the lender came to accumulate the funds they are lending you. Additionally, you will need to prove you own your property or asset being used to secure this loan and how you came to own that property.

Collateral Requirements

The USCIS permits any form of collateral to secure their EB-5 loan. The main requirement is the loan must be secured by your personal properties or assets, including but not limited to real estate, equipment, and property holdings. Thus, any assets owned by your EB-5 investment or new commercial enterprise cannot be used as collateral.

Furthermore, you need to demonstrate that your loaned capital was sourced lawfully, so ensure your petition involves evidence regarding your EB-5 loan, its terms, and the personal properties you used to secure this loan.

Let’s say you are investing in a new commercial enterprise in a targeted employment area. In that case, you will need a minimum of $800,000 for your investment. You happen to own a 20% share in a luxury condominium worth $1 million, and you plan to take out a $1 million EB-5 loan and use your 20% share in the luxury condominium as collateral to secure your loan. You intend to use this $1 million to fund your EB-5 investment.

In this case, you will need to compile the following documents: proof that you own a 20% share of this luxury condominium, evidence that it is operational or still doing business (e.g., a website, Airbnb postings and bookings, invoices, etc.), a certified valuation for this luxury condominium, and the property’s title. In addition, you must provide evidence of how you ended up owning a 20% share so it can be traced and proven lawfully obtained.

Obtaining a Loan from Financial Institutions

You have the option to seek EB-5 loan from traditional banks and lending institutions. The main benefit to choosing this option is these institutions often offer a wide range of loan products tailored to your needs. Alternatively, investing in a regional center project often connects you to qualified and experienced lenders or institutions who can assist you in navigating the loan process. Regional centers often have already established relationships with financial institutions for loan purposes.

The loan application process typically involves compiling a comprehensive application package, including your business plan, financial statements, personal financial information, and details about the new commercial enterprise you intend to invest in. Lenders will then assess your creditworthiness, considering factors like your credit history, income, and assets.

Furthermore, collateral will undoubtedly play a role in securing a loan, so the lender will evaluate the value and adequacy of any collateral you offer. Interest rates and loan terms are also critical considerations. These factors will vary among lenders and impact the overall borrowing cost. Due diligence is critical to make an informed decision. We recommend researching and comparing multiple potential lenders, focusing on those with experience in EB-5 financing. Of course, hiring an experienced immigration attorney will also be beneficial.

Obtaining a Loan from Family Members or Friends

You can obtain an EB-5 loan from your family members or friends provided it is properly documented. Ensure the loan and its repayment terms are recorded to ensure a proper demonstration in tracing the investment funds’ origin.

It is also important to remember that it must be secured regardless of where you obtain your EB-5 loan. Thus, ensure you properly appraise the property, securing this loan from your family or friends. However, note that your EB-5 enterprise’s assets cannot secure the repayment of this loan. It must be your personal property or asset.

You must demonstrate clear ownership of your personal property, too, i.e., via a title. Additional evidence includes a signed and executed agreement contract mortgaging the property, bank statements showing the loan’s transfer from the lender’s account to yours, and proof that the lender lawfully obtained this fund in the first place. These documents are important since your investment funds’ origin must be traceable.

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