EB-5 Program
Green Card Fund is open to working with reputable developers who are seeking EB-5 financing for their projects. EB-5 financing can be a useful part of a project’s capital stack as it is typically cheaper than traditional capital, but there are considerations that are unique to EB-5 and differ from dealing with a traditional lending source. Please consider the following when considering EB-5 financing
Safety First
Developers must understand the psychology of an EB-5 investor. Unlike a traditional investor, the main goal of an EB-5 investor is not financial return. Instead, the main objective is to earn a permanent green card. EB-5 investors earn a permanent green card by proving that their investment led to the creation of 10 new jobs. From a practical standpoint, this typically means that the project was successfully completed.
Developers who are looking to use EB-5 financing, whether as a senior loan or a mezzanine piece, must be able to provide bridge funding until the EB-5 financing is in place Additionally, developers “must be prepared to put up collateral to secure the project.
Developer Equity
EB-5 investors want to know that a developer is fully committed to a project’s success. Developers that are looking to use EB-5 financing must have skin in the game. Green Card Fund expects developers to have their own funds account for at least 20% of the capital stack.
Exit Timeline
Developers that are looking to utilize EB-5 financing must be prepared to repay the EB-5 loan within a specific time frame. EB-5 loans are typically three or five years in duration and often have two one-year developer options. Thus, developers seeking EB-5 financing must be able to repay their EB-5 loans in three to seven years. EB-5 is not a good fit for developers that are looking to quickly flip their projects upon completion.
Proven Track Record
Green Card Fund is only interested in working with developers that have established a proven track record. With the immigration status of numerous investors on the line, a project involving EB-5 financing is just not the right situation to get your feet wet or learn on the job. However, if a developer has consistently proven that they know how to complete successful project than EB-5 might be a good option for their next project.
Industry Focus
One of the reasons Green Card Fund has been successful in EB-5 is because it sticks to what it knows best. Green Card Fund and its parent company, NewGen Worldwide, have more than 15 years of experience in both EB-5 and the hospitality industry. With that in mind, Green Card Fund is only looking to work with projects in specific commercial real estate sectors – hospitality, education, and healthcare.