EB-5 Financing Lawyer: What JMBM Does to Help Developers With EB-5 Construction Financing
Focus on helping developers
Client confidentiality precludes us from listing clients and projects we have assisted with this program, but suffice it to say that some of the best known names in the business are tapping into this funding source to fill out their capital stack at a favorable cost. And we have helped some of the biggest and highest profile players.
JMBM has closed more than $1.5 billion of EB-5 financing and has sourced more than half of that for our development clients.
We specialize in representing developers and projects that we believe can qualify for “preferred” status. This concept is discussed in great detail in this article: “Development financing: How to win the race for EB-5 capital.”
For developers and projects that qualify for “preferred” status, we provide business and legal advice to guide the developer through the entire capital raising process. This includes validating that the developer can qualify for the favorable financing and actually sourcing the capital.
Here is a more complete list of how we can usually assist:
- Source EB-5 financing
- Evaluate EB-5 threshold feasibility
- Optimize developer profile and project structure
- Assemble the right “EB-5 team” with best players
- Help size and structure the capital stack
- Negotiate optimal deal terms with current input on what is “market”
- Negotiate and finalize funding documents with the capital source
- Validate EB-5 funding strategy
- Oversee issues in the capital raising process
- Close the financing
As the developer’s counselor, we negotiate a fairly complex loan or preferred equity transaction in a regulatory environment that requires compliance with USCIS, SEC, & FINRA. This process also necessitates identifying, selecting, negotiating and coordinating with an immigration law firm, an economist, various hotel consultants and one or more regional centers to get your loan properly sized and documented.
From TEA designation through loan closing
As part of the financing process, for each EB-5 financing project, we work with each client and appropriate members of the EB-5 team to do the following:
- Obtain a TEA designation and letter of authorization
- Manage “new job count” issues for direct, indirect, and induced jobs to ensure compliance with EB-5 requirements of the USCIS to support the size of your EB-5 financing
- Assist in developing the proper business plan for your project
- Verify calculations from the economist and regional center and strategize best way to maximize loan size and terms for the developer
- Drive loan size to maximize the financing opportunity for the developer and optimize the capital stack
- Negotiate loan commitment and loan documents that reflect proper collateral, have appropriate escrow release provisions and security so terms will be acceptable to both the developer and to traditional construction lenders who may be in a senior lien position
- Negotiate and finalize inter-creditor agreements, escrow agreements, completion guarantees, various security agreements (depending upon collateral provided by the developer), and other related financing documents
- Jim Butler
- Jeffer Mangels Butler & Mitchell LLP
- U.S. Citizenship and Immigration Services
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- FINRA - Financial Industry Regulatory Authority
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