Although the future of the EB-5 visa program is uncertain at this point in time, it has been given a short extension with the reopening of the federal government and it is believed that the program will continue. It is important to note though that in December 2018 a judge ruled that applicants for the EB-5 program can use funds that have been loaned to them to qualify for the program (previously some applicants who had borrowed money to invest in the U.S. had been denied). However, banks can be slow to lend money to foreign nationals as they view such borrowers as high risk and able to flee from the debt rather than repay it. So what is a potential foreign investor to do? A private capital, or hard money, loan could be just the solution.

Unlike banks and other institutions that are insured and examined by the Federal Deposit Insurance Company (FDIC), private capital and hard money lenders are individuals or small businesses that lend either their own money or funds pooled together by investors and, therefore, they are subject to far fewer governmental regulations and restrictions. These lenders also have greater control over the funds that they lend as they do not have to report to a committee or other external decision-maker. Also, private capital lenders are typically more interested in the property that will secure the loan rather than a borrower’s credit score or credit history as they use an asset-based lending model. This is part of what allows private lenders to extend loans to foreign national borrowers because the loans are secured by a property rather than the borrower. 

Once you’ve found a commercial real estate property or development project that fits the guidelines for the EB-5 program (https://www.uscis.gov/eb-5), it’s time to find a local private capital lender. A private lender will typically provide up to 65% of the appraised value of the property that will secure the loan, so you can make your own money go further, allowing you to invest more, which can be helpful if you are investing in a metropolitan area where the requirements are higher than in a rural area (at least $1 million versus approximately $500,000). Private lenders can also help by processing your loan application in a matter of weeks rather than months, which means you can get your visa application submitted sooner. 

If you are a foreign national wanting to invest in Colorado and in need of a private capital loan, contact Montegra today at loans@montegra.com for more information about our loan programs.