For a new commercial enterprise or a real estate development project, funding through the EB-5 Program can fill a variety of capital funding gaps, including serving as mezzanine financing, replacing or augmenting bank financing, or supplementing the equity contribution. In recent years, the majority of these investments have occurred in real estate development projects involving new construction, renovations, or expansions.

EB-5 funding is also used for non-real estate companies involved in new commercial enterprises or troubled businesses where the investment can save jobs. Successful non-real estate projects include manufacturing plants, call centers, information technology firms, film studios, shipping companies, and casinos.

EB-5 Program money is attractive for many reasons. The investments can be less expensive than traditional sources of financing. Investors receive a modest preferred return, typically between 0.5 percent and 1 percent plus the foreign marketing agents receive an annual return of 1 percent to 3 percent of the amount they raise. In addition, each immigrant investor’s capital contribution is at-risk equity; the project and the principals are prohibited from guarantying the return of capital. The EB-5 Program also can improve cash flow during the startup or construction and leasing phase of a real estate project since principal and interest are often deferred up to five years and interest is often deferred until payable from cash flow.