Guidance for EB-5 Developers

Chapter 1: Financial Considerations

Chapter 1: Financial Considerations

© James C Wolf Jan 2021 (updated July 2021)

Developers consider EB-5 funding as part of their capital stack since EB-5 money typically comes with below market terms: low interest rates, no personal guarantee, no prepayment penalty, subordination, etc. Estimating the Optimum EB-5 Raise is the first step in evaluating whether to seek EB-5 funding.

When looking at the option of EB-5 funding, a Developer typically considers the following:


EB-5 funding can take more than one year before it arrives. EB-5 is best used as a method to take out more expensive funding already committed to the Project.

Terms of EB-5 Funding

EB-5 funds typically are received by the Developer as a loan under very favorable terms, for example, 1-2% APR, unsecured, and repayment period of 5-10 years.

Capital Stack

EB-5: In order to give the offering an attractive job creation allocation, most developers find it is best to limit EB-5 funding to no more than 33% of the total project cost. Most EB-5 offerings provide Developers with debt financing, although some may provide an option to convert to equity.

Equity: In order to reduce EB-5 investor’s perceptions of risk, most developers find it is best to allocate at least 10 – 25% of the total project cost to Equity. The Developer must show availability of funds to support any planned Equity contribution.

Debt: The remainder of project cost can be allocated to commercial Debt. This debt usually holds a security position ahead of EB-5 debt. The Developer must show availability of funds to support any planned Debt, in the form of a Term Sheet from the Lender.

Minimum Investment per Investor

If the Investment will be placed in a project located in a high unemployment area or a rural area, the minimum investment per investor is $500,000.

In all other project locations, the minimum investment per investor is $500,000.

Some years ago, the USCIS proposed a rule raising the minimum investment amounts. The USCIS has taken no action to finalize the rule.

Optimum EB-5 Raise

Based on the guidelines for Capital Stack, Minimum Investment Per Investor, and Job Creation, the Optimum EB-5 Raise can be estimated.

For example, a hypothetical Project may cost $20 million to establish and generate $5 million annual revenues during the first two years of operation. The following table shows the Optimum EB-5 Raise would $6,500,000, allocating 27 jobs per investor:

EB-5 Capital for Developers

We give client-centered advice, representing only one side at a time in each EB-5 deal, without conflicts of interest or bias.

We leverage professional experience as an EB-5 attorney, EB-5 regional center operator, EB-5 Issuer, and EB-5 project developer, for benefit of each type of stakeholder.

For further information on EB-5 Capital for Developers, see other chapters in this series.

Schedule a call today with James Wolf, the experienced EB-5 investment attorney, to discuss your project’s capital needs and the potential for EB-5 investment.

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