Comment: Value of EB5 Capital

Covid has radically altered the US capital market. Capital as such is harder to come by. Banks have tightened their lending standards. The role of mezzanine capital has expanded as a result. As EB5 has traditionally been in the mezzanine position, this has increased the value of EB5 capital. Getting EB5 capital enables projects to unlock other parts of the capital stack, which makes EB5 particularly attractive due to the leverage it provides to the entire capital stack. This enables issuers who are raising EB5 capital for projects to get the most favorable terms for the EB5 component of the stack.

However, valuable as EB5 capital is, competition for it has sharply increased, and is increasing further. Due to the change in TEA definition in the November 2019 regs, the competitive landscape of the EB5 field has changed. It has brought in new EB5 players. The market has moved from big projects in big cities to smaller projects in smaller cities. It is a period of massive transition for the industry. The number of projects in the market has tripled since early 2020 and it is likely to further double by the end of the year, making it a very crowded market going into 2021. However, the nature of competition in 2020/2021 and beyond is very different from the $500K EB5 market in that there are scores of smaller players, with the big developers conspicuously absent.

To actualize the value of EB5 capital in the covid era you need two things:
A. a strong capital stack and long development track record
B. Four skills: (i) marketing (ii) selling (iii) operating online and (iv) traveling where and when appropriate.

Use Four Skills: (i) marketing (ii) selling
(iii) online (iv) travel

Don't Use Four Skills: (i) marketing (ii) selling
(iii) online (iv) travel

Strong capital stack &
long development track record

Best Results

Successful EB5 Raise
Possible

Weak capital stack &
short development track record

Successful EB5 Raise
Possible

EB5 Raise Will Likely
Fail

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Focus: H1B to EB5 Online Meetings
We will put you in front of an audience of Indian H1Bs who need EB5 to get a green card within their lifetime (EB2/EB3 wait times for Indians are over 100 years!). You will have two way interaction online with potential investors using our platform, not just a one way presentation. ILW has conducted 120+ in person H1B to EB5 events, we understand the cultural nuances and pain points of this target audience, and we will consult with you to help you connect with this audience. The world after coronavirus is radically different, and it may last a lot longer than any of us would like. However, the world does not stop due to a virus- our online meetings allow you to continue your EB5 raise in spite of the coronavirus. Engage ILW now, and we will get you in front of potential investors fast--don't let your competitors get ahead of you. Call us at 212-545-0818 to find out how we can help you, or email us at webmaster@ilw.com or online.

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