The early repayment of a loan used to fund an EB-5 investment will have no effect on the investor’s EB-5 visa application. In simple terms, when an EB-5 investor makes a loan, the investor becomes the owner of the loan amount. For EB-5 investments, United States Citizenship and Immigration Services (USCIS) requires that the investor “is the legal owner of the capital invested and has obtained the capital through lawful means,” as per the USCIS Policy Manual. Therefore, if the investor provided the necessary source-of-funds documentation to prove that they legally own and lawfully obtained the capital they invested, early repayment of loaned funds used for an EB-5 investment has no bearing on the rest of the EB-5 application process.
One of the most common sources of capital for EB-5 investors is asset-backed loans. While it is perfectly acceptable to use borrowed funds to make an EB5 investment, loans can complicate the process of proving the investment funds were legally obtained. For example, if an investor borrows from a bank and uses an asset as collateral, the investor must provide evidence that they are the legal owner of the asset and that they used lawfully obtained funds to buy the asset. This becomes even more complicated when an investor takes a loan from an individual. In this case, the investor has to prove that they own the asset and used lawfully obtained funds to buy it, and the lender must provide evidence that the loaned funds derive from legal sources.
Because of the importance and potential complexity of clearly setting out the source and path of EB-5 investment funds, investors should work with EB-5 professionals to prepare their source-of-funds documentation and to guide them through the EB-5 visa application process. The first step is to retain immigration counsel with EB-5 experience. A good EB-5 attorney can answer any questions that arise during the years-long application process or provide referrals to financial and other experts in the EB-5 arena.