Each EB-5 investor must make an equity investment in a Regional Center or business. The Regional Center or business may then either make an equity investment in a project or loan the capital to the project. What is the difference?
Many like the loan plan as there is a due date on the note and the time is set for return of the capital. The equity investment requires refinance or sale of the project or some other source of funds for return of the investor’s capital. Both investments must be “at risk,” which means the capital is subject to loss.
The investor should discuss the “exit strategy” with the Regional Center for when the capital may be returned.
Martin Lawler
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