By Anayat Durrani
A firm’s repayment history is a good reference for investors looking to work with a reputable company. The repayment process helps investors achieve their goals of acquiring permanent residency and the return on their invested capital. Firms that return the full principal to an immigrant investor in the EB-5 visa program prove they have experience managing all phases of the investor program.
“To date, we have had 13 project repayments, totaling over 300 repaid investors,” says Katherine Willis, director, marketing and communications for EB5 Capital.
She says their repaid projects range from a ski resort in Vermont to the most recent repayment of Hilton Garden Inn, located in Goleta, CA.
EB5 Capital owns and operates USCIS-authorized regional centers in 14 states. The firm has raised approximately one billion dollars of foreign capital across more than 30 EB-5 projects.
Repayment of EB-5 investment to investors
Regional Center-project business plans and offering documents typically include an exit strategy in which an EB-5 investor gets the full investment principal back with accrued interest. Depending on varying loan terms, EB-5 investors can typically expect to get repayment within five to seven years, but it varies.
CanAm, which manages several USCIS-designated regional centers nationwide, announced its 50th EB-5 repayment to investors. In 2018, 100 CanAm investors invested $50 million to help a Philadelphia-based company modernize its operations. The firm paid the EB-5 loan repayment in full on June 20.
Tom Rosenfeld, CanAm president and CEO, said nothing is more gratifying than rewarding EB- investors’ trust by returning their capital from a successful EB-5 project.
CanAm has had more than 6,000 qualifying investors that have collectively invested more than $3.14 billion for 65 EB-5 projects. Currently, CanAm has repaid more than $2.24 billion in EB-5 capital, representing 4,500 families.
Repayment vs redeployment of EB-5 funds
Greater processing times, higher visa demands and wait times, and visa retrogression impacting countries like Vietnam and China made redeployment of EB-5 invested capital necessary. Per the USCIS, EB-5 funds must be “at risk” and not returned during an investor’s two-year conditional residence period. Redeployment is needed to maintain the funds “at risk” if an EB-5 investment is repaid before investors complete their respective sustainment period.
Backlogs and long processing times result in delayed I-526 approvals and conditional residency periods beyond EB-5 project loan terms. Redeployment of capital into a different commercial business can occur should an EB-5 investor not meet the requirements for conditional residency and the initial business plan is complete, jobs have been created and investor capital can be returned or already has to the NCE.
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