Since 1990, foreign investors from China, the Middle East, and Canada have invested billions of dollars in American businesses and created thousands of jobs through the EB-5 Immigrant Investor Program. The program allows foreign investors to obtain their green cards by investing in job-creating projects in America. The program has become popular with business owners as it allows them to gain supplemental financing, which can be easier to obtain than bank or small business loans. Here are some top tips for businesses looking for EB-5 funding.
- Marketability is key. There are hundreds of EB-5 projects available, so competition is fierce. The only way to stand out to potential inventors is to create a marketing campaign that will build trust, showcase your security measures, address any potential investor concerns, and will appeal to regional interests. EB-5 centers are set up on a regional basis, so remember to think regionally. Do your research to learn about your investors, and build a campaign that appeals to them.
- Be transparent. Trust is essential, and so is transparency. Make sure you are open about the potential risks of your project. Do you have the building and zoning permits you’ll need in place already? Do you have the land for the development secured, or this will depend on your investors? Make sure you have feasibility reports that outline reasonable numbers for your project. If you have all your loose ends tied up, you have a better shot of securing EB-5 investment.
- Prepare for tough questions. Aside from the firms that will look at your project, you’ll also be questioned by the investors. They will want to know where their money is going, how well their money is secured, and whether there are many risks involved. Be prepared to answer these questions to build credibility and the most secure project.
- Create a job buffer. Job creation is one of the main aims of the EB-5 program. 10 jobs from the project must be allocated to each application. If you’re seeking ten investors, don’t just create 100 jobs. Create 115 jobs instead. A 15 per cent buffer is useful, as if fewer jobs are then created for any reason, your investor won’t lose out on the jobs they need in order to have their green card application approved.
- Apply for exemplar status. The easiest way to stand out from your competitors and speed up the application process is to get exemplar status from USCIS (US Citizenship and Immigration Services). Exemplar status is a stamp of approval from USCIS, which makes your project pre-approved. Investors will look for this. The process isn’t simple and can take a long time, but an investor will appreciate the shorter waiting time. A stamp of approval already on your project means you have less work to do as the project progresses. You’ve also offered peace of mind to your investor.
With preparation in advance, you can secure investment through the EB-5 program, and get your project underway, without the wait for a small business loan.