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I don’t have $800K in cash. What are my options?

I don’t have $800K in cash. What are my options?

If you do not have $800K available in cash now, you still have several options to fund your investment:

  • Gifts

Gifted funds are an acceptable source for the EB-5 investment, provided that the EB-5 investor documents the legal source of those funds. The donor would need to provide documentation on how they acquired those funds (e.g. sale of overseas investment property) and a gift affidavit describing the relationship between the donor and donee, the reasons for the gift, and that the EB-5 investor is not obligated to reimburse the gift. Please note that gifted funds may be subject to a gift tax. The donor and the EB-5 investor are strongly recommended to consult a tax professional to determine any tax implications of gifted fund transfers.

  • Loans

Loans are commonly used to fund the EB-5 investment. Often, EB-5 investors will obtain loans secured by their personal assets, such as a home equity line of credit (HELOC). Loans may be borrowed from a private individual as well, but substantial documentation is necessary, including the written loan agreement, the lender’s income tax returns, and documentation of how the lender accumulated the loaned funds.

You may also use unsecured loans. In October 2020, the U.S. Court of Appeals for the District of Columbia in Zhang vs. USCIS affirmed that loan proceeds are “cash” for purposes of EB-5 regulations, rejecting USCIS’s requirement that loans be secured by the EB-5 investor’s assets.

  • Partial Capital Contributions

An EB-5 investor may invest in installments using a partial capital contribution. USCIS permits EB-5 investors to file the I-526 petition by showing they are actively in the process of investing, provided they prove an actual commitment to fund the total investment amount within a defined period.