EB-5 loan agreements cannot guarantee either mandatory redemptions or options exercisable by investors are not permissible by USCIS. In general, an investor cannot be guaranteed either partial or complete repayment of his or her investment capital.
However, options exercisable by the new commercial enterprise (NCE) are generally allowable. This includes a redemption agreement between the investors and the NCE that does not offer investors a right to repayment.
An example of such an allowable arrangement is an option that allows the NCE to repurchase investor shares at its own discretion. Such an option mandates investors to sell all or a portion of their ownership interest back to the NCE.
Loan arrangements may be structured to incentivize but not mandate the NCE to buy back investor interest at certain times that are favorable to the investors.
Additionally, investors are allowed to receive a return on investment in the form of distribution of profits from the NCE, even during the investment-sustainment period. But the distribution cannot be part of the investor’s investment capital and such a distribution cannot be guaranteed.
