Repayment Guaranty | Job Creation Guaranty | I-526E Approval Refund Guaranty
Many EB-5 investors worry about whether their investment funds will be repaid. An EB-5 investment often represents the life savings of an EB-5 investor’s family. Losing this money would be catastrophic. As a result, EB-5 investors want to know their money is as safe as possible.
The Twin Lakes Georgia project offers EB-5 investors unparalleled safety. One of the ways Twin Lakes lowers investor risk is through three key guaranties from a parent company of the project’s developer, The Kolter Group. While these guaranties do not eliminate all financial and immigration risk for EB-5 investors, they do make Twin Lakes one of the lowest risk EB-5 projects on the market today.
In this article, you’ll learn about the Twin Lakes Georgia project being developed by Kolter. First, we will explain the EB-5 “at-risk” requirement and what kinds of guaranties the EB-5 program allows. Then, we will discuss Twin Lakes Georgia’s guaranties and what they mean for EB-5 investors. Finally, we’ll provide more information about Kolter and its Cresswind brand.
- Guaranteed EB-5 Investor Repayment Is Not Allowed
- A Loan Repayment Guaranty Is Allowed
- A Job Creation Guaranty Is Allowed
- An I-526E Approval Refund Guaranty Is Allowed
The EB-5 “At-Risk” Requirement and Guaranties
EB-5 rules are complicated. This is especially true when it comes to what an EB-5 project can promise its investors. As a result, an investor should always hire a qualified EB-5 immigration attorney. An experienced lawyer will be able to help ensure that an EB-5 investment complies with all EB-5 program rules.
Following is a basic breakdown of which kinds of guaranties are not allowed and which are.
Guaranteed EB-5 Investor Repayment Is Not Allowed
An EB-5 investor’s investment must be placed fully at risk. This means the investment must be subject to gain or loss. An EB-5 project cannot promise EB-5 investors that it will repay their investments or give them a certain rate of return. That kind of promise would mean the investment is not subject to loss.
So, if an EB-5 project promises its investors that 100% of their capital investment will be repaid with no chance that some or all of it will be lost, the project is not EB-5 compliant.
A Loan Repayment Guaranty Is Allowed
While it may sound similar to a guaranteed EB-5 investor repayment, a loan repayment guaranty is allowed by the EB-5 program. Following are some of the key differences:
|Guaranteed EB-5 Investor Repayment||EB-5 Loan Repayment Guaranty|
|Not allowed under EB-5 rules||Allowed under EB-5 rules|
|Made to each individual EB-5 investor||Made to the EB-5 fund as a lender|
|Built into the EB-5 investment offering||Built into the EB-5 loan agreement|
|A promise that EB-5 investors will not lose their money||Collateral that secures the EB-5 loan in case the borrower defaults|
|EB-5 funds are not at risk of loss||EB-5 funds are at risk of loss but are safer|
Loan repayment guaranties are allowed under EB-5 rules because they are not a promise to investors that their money will be repaid. Instead, such a guaranty is a legal agreement between the EB-5 lender and a third-party guarantor. This guarantor agrees to pay back the EB-5 loan in case the original borrower is unable to do so.
Think of it this way—the borrower of the EB-5 loan signs an agreement promising to repay the loan. But that does not guaranty the borrower will be able to do so. Repayment is not certain. A loan repayment guaranty is an agreement like the loan agreement, but in this case, another company is promising to pay back the loan in case the borrower cannot. Even if it is unlikely, this third-party company may also be unable to repay the loan. Repayment is still not certain—but it is more likely.
A loan repayment guaranty is only as good as the company making it. A guarantor with no track record or few assets doesn’t add much financial security. For a loan repayment guaranty to be strong, it needs to be backed by a company with a lot of different kinds of assets. That company should also have significantly more net equity than the balance of the EB-5 loan. The guarantor company should have a great reputation and history of always paying back its debts.
A Job Creation Guaranty Is Allowed
To qualify for a Green Card, an EB-5 investor’s investment must create at least 10 full-time jobs for U.S. workers. Since job creation is key to immigration success, an investor should have confidence that the EB-5 project will produce enough jobs. An EB-5 project can reduce the immigration risk to its investors by offering a job creation guaranty.
For most projects, job creation is calculated from how much money is spent. A job creation guaranty is an agreement between the EB-5 lender and a third-party company that money will be spent according to the project’s budget. If the project’s developer cannot continue developing the project, the third-party guarantor will make sure the planned amount of money is spent. By ensuring that money is spent as planned, the guarantor is also ensuring that jobs are created as planned.
Job creation guaranties are allowed under EB-5 rules. For EB-5 investors, this kind of guaranty adds another layer of safety since they are more likely to meet the requirements of the EB-5 program.
An I-526E Approval Refund Guaranty Is Allowed
The goal of an EB-5 investment is to immigrate to the United States. If an EB-5 investor’s I-526E immigrant petition is denied by the government, he or she will not be able to get a Green Card. Besides this, his or her money could be stuck in the EB-5 project for several years. EB-5 projects can reduce some financial risks associated with having an immigrant petition denied by providing an I-526E approval refund guaranty.
I-526E approval refund guaranties are allowed under EB-5 rules. With this kind of guaranty, a third-party company agrees to repay an EB-5 investor early if his or her I-526E petition is denied. This means an investor faces less risk of having his or her money tied up in an EB-5 investment that won’t result in getting a Green Card.
Twin Lakes Georgia Offers Three Guaranties That Lower Risk
Twin Lakes Georgia is a 940+ acre single-family home community in Hoschton, Georgia. Hoschton is a suburb northeast of Atlanta. This award-winning development project offers EB-5 investors an outstanding, low-risk option.
First, Twin Lakes Georgia is located in a rural targeted employment area (TEA). As a rural TEA project, Twin Lakes qualifies for a reduced investment of $800,000 (instead of $1,050,000). It also grants investors access to priority processing and a special category of set-aside EB-5 visas. Under recent reform legislation, 20% of all EB-5 visas are set aside for investors who invest in rural TEA projects.
Beyond this, Twin Lakes Georgia is exceptional in that it offers all three of the guaranties discussed above that are allowed by EB-5 rules. Together, these guaranties significantly lower EB-5 investor risk.
Following, we’ll examine each of Twin Lakes Georgia’s guaranties in more detail:
EB-5 Loan Repayment Guaranty
Twin Lakes Georgia is an EB-5 loan project. EB-5 investor funds will ultimately be part of a loan to the developer, Kolter, and it will use this money to build the project. This EB-5 loan is secured by a repayment guaranty from a Kolter parent company. The guarantor company has diversified assets and a significant amount of net equity—far more than the balance of the EB-5 loan.
Twin Lakes Georgia’s EB-5 loan repayment guaranty provides an unprecedented level of financial security to EB-5 investors. We are not aware of any other projects on the market today where the EB-5 loan is backed by such a strong guarantor.
Job Creation Guaranty
Twin Lakes Georgia has already created more than 1,800 jobs as of March 2023. This means that the job creation requirement of 10 jobs per investor has already been met for all EB-5 investors in this project.
Even so, the project has a job creation guaranty from a Kolter parent company. Under this guaranty, a Kolter parent company has agreed to step in if Kolter were to fail to spend money as planned.
I-526E Approval Refund Guaranty
Twin Lakes Georgia offers EB-5 investors an I-526E approval refund guaranty. In the event an EB-5 investor’s I-526E petition is denied, they will receive a prompt return of their money. As with the other guaranties, this refund guaranty is provided by a Kolter parent company with significant assets and equity.
Kolter: A Trusted Developer
The Kolter Group is a real estate development and investment company based in the United States. Since 1997, Kolter has invested in over 180 projects with an expected value of over $24 billion.
Kolter has qualified for development loans from some of the largest and most conservative lenders in the United States. The company has never failed to repay a loan.
Kolter also has extensive EB-5 experience. To date, Kolter has collaborated with EB5AN on more than 10 EB-5 development projects. All EB-5 investor capital is either in good standing or has been repaid.
Learn More about Twin Lakes Georgia
Kolter’s Twin Lakes Georgia EB-5 project is one of the best EB-5 investment opportunities on the market today. If you’d like to learn more about this compelling rural project, please schedule your free consultation.