Now is the Time for an EB-5
The industry fully expects the EB-5 program will be reauthorized with some proposals, which are more or less attractive to certain parties. But final resolutions should be satisfactory.
Some developers have decided to do nothing with the EB-5 financing opportunity until all is finally known. Amidst the uncertainty of when and how the EB-5 renewal legislation will finally be resolved. Those developers wanting to take advantage of EB-5 funding should get started now.
Many think that Congress may play “kick the can down the road” with several interim extensions of the EB-5 program. Others hope that Congress will act by the September 30, 2016 date.
The “wait and see” approach may be a mistake for many developers, especially those who are ready to start construction. The reasons why not to wait:
- Nominal cost. The cost is relatively nominal to clear certain preliminary hurdles, to evaluate availability of EB-5 financing, identify a regional center funding source, and even negotiate a preliminary term sheet. The small cost of completing these preliminaries early should be greatly outweighed by the benefits.
- Be at the front of the line. If you have a project that is ready to start construction (or very close), you want to be at the head of the wave of new EB-5 projects coming into the pipeline for marketing to immigrant investors. You want to identify and sign up the best regional center you can get to optimize the size, cost, timing and certainty of your EB-5 capital.
- Avoid the traffic jam. The early bird will tie up the best lenders and terms. The top regional centers have good capacity but we expect their bandwidth to be filled quickly after the final EB-5 legislation is adopted as many hundreds of developers create a massive traffic jam on the road to EB-5 funding.