You have heard that the EB-5 Program offers a low-cost alternative way to fund development projects or businesses and you would like to learn how to attract EB-5 investors.
In order to better attract EB-5 investors to fund your project, you must understand the EB-5 Program requirements.
Here are 4 tips to help attract EB-5 investors.
EB-5 Program requirement: Investors must invest either $1 million or $500,000 into a qualified project.
Tip for attracting EB-5 Program investors: More investors chose to invest the reduced requirement amount of $500,000 in a TEA. A TEA is a targeted employment area, an area that is either rural or has a unemployment rate 150% the national average. Unemployment data changes yearly, so it's important for a project developer to have an up-to-date data in order to stay competitive. While a TEA sounds like it must be located in a rural area, many are located in major cities such as New York.
EB-5 Program requirement: EB-5 Investors must be credited with creating 10 full-time jobs for qualified U.S. workers.
Tip for attracting EB-5 Program investors: In order for EB-5 investors to fulfill their program requirements, they must be credited with job creation. A project that does not have a job buffer will have a tough time attracting EB-5 investors. Project developers often associate with regional centers so that they can gain job creation advantages. Regional centers can count direct, indirect and induced job creation, instead of simply direct jobs. Indirect and induced jobs make fulfilling the EB-5 job creation requirements much easier. In addition, project developers also gain the added bonus of being able to use the regional center's reputation when marketing their project to foreign investors.
EB-5 Program requirement: EB-5 investors must place the required capital investment amount into an "at-risk" project. There can be no guarantees that the investor will have the capital returned to them. The capital must be in a position where there is risk for potential losses as well as potential gains.
Tip for attracting EB-5 Program investors: Investors can choose from numerous EB-5 projects. Since their primary goal for investing in the EB-5 Program is to obtain green cards for themselves and their immediate family, they're less interested in a high rate of return on their investment and more concerned that the project will fulfill their program requirements and return their initial investment amount. As a result, newer and upcoming project developers must devise a strategy that offers investors assurances that they have selected a strong project. This means that project developers must do their due diligence and learn as much about the program as possible so that they can easily deal with and overcome investor concerns.
EB-5 Program requirement: The EB-5 Program keeps investors on a strict time schedule.
Tip for attracting EB-5 Program investors: To develop trust with potential investors you must be transparent. Effective communication is the key to alleviating any investor concerns. Problems are bound to arise in any development project or business. Investors are less likely to worry if they notified of potential risks and the plans to deal with them. Investors generally look for projects that possess teams of professionals with strong backgrounds in their fields and solid reputations, so that they feel more confident that the project will stay on track.