The Benefits of EB-5 Capital

Ideal bridge financing to get harder-to-fund projects up and running

 

A useful tool for community economic and social development

 

A lower-cost source of financing that can be more readily accessible

 

Job Creation: From FY 2005-2013, EB-5 accounted for more than $6.5 billion in capital investment supporting over 131,000 U.S. jobs – and the numbers are growing every day.

 

 

Reasons to Utilize EB-5 Capital

 

Money not otherwise obtainable

 

EB-5 capital is available to industries and projects which are currently not finance-able in the traditional capital markets or available from limited state and local government capital budgets. This includes both private for-profit projects and government and quasi-government borrowers whose capital budgets are sharply constrained by current economic conditions.

 

Money obtainable at below market rates

Because EB-5 investors are looking to the green card benefits as their principal compensation for investment, they are willing to accept financial returns far below market.

 

Money obtainable with flexible terms and structures

 

EB-5 projects may be structured on an interest only basis or with deferred payments of interest or other flexible terms, not available from traditional sources.

 

 

EB-5 Capital Definitions

 

Job Creation Leverage

 

EB-5 regulations permit the allocation of 100% of a project’s job creation benefits to EB-5 investors where the total project capital consists of both EB-5 and non-EB-5 capital. For example, a $400 million wind farm project might have a total job creation impact of only 3 jobs per $500,000 invested (or 6 per $1 million) due to the capital intensive and low employment profile of such a project, resulting in a total jobs impact of 2,400. But if the EB-5 capital is only $100 million of the total investment, then the resulting 2,400 jobs credited solely to the 200 EB-5 investors will provide 12 jobs credit for each EB-5 investor, satisfying the 10 jobs requirement, notwithstanding the low 3 jobs per $500,000 econometric result.

 

Investment Amount

 

$500,000 in a targeted employment area (TEA). Multiple investors at $500,000 each are rolled into a Limited Partnership managed by Columbia International Finance in order to attain the targeted amount of funding for the project.

 

Targeted Employment Area

 

A TEA is a geographic area for which population and unemployment data exists that qualifies either under the rural definition or unemployment definition of a TEA. A rural TEA is located: (1) outside the limits of any MSA (metropolitan statistical area – as designated by US Department of Commerce); and (2) not within the limits of any incorporated (city, village etc.) area with a population of more than 20,000.   Unemployment TEA Located in a geographic area where the aggregate annual unemployment rate for that area is 150% of the national average unemployment rate, as designated by Employment Securities of Washington State.

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