Lawful Source of Funds: Documenting a Loan Used To Make an EB-5 Investment

Proving the lawful source of the EB-5 investment funds is a key requirement under the EB-5 program. The investment funds may come from a loan provided that the investor’s personal assets are used as collateral to secure the loan. U.S. Citizenship and Immigration Service requires that substantial supporting documents be submitted with the EB-5 application in order to demonstrate a loan as the lawful source of the invested capital.

If available, the Investor should include the following documents with the EB-5 application to prove the investment funds were obtained from a loan secured by his or her personal assets:

• Capital Source Statement. The Investor should submit a statement stating that the investment funds were derived from a loan and that the loan is secured by his or her personal assets.
• Income Tax Returns. The Investor’s past five years of individual tax returns should be submitted with the EB-5 application.
• Bank Statement. The Investor should include his or her bank statement demonstrating the receipt of the loan funds with the EB-5 petition.
• Loan Contract. The written loan contract should be submitted with the Investor’s EB-5 application which should contain the repayment period, interest rate, and a description clearly identifying the Investor’s personal assets used to secure the loan.
• Documents Demonstrating the Lawful Source of Funds Used to Purchase the Collateral. The Investor should submit evidence demonstrating how he or she obtained the funds used to purchase the personal assets used to secure the loan.
• If the lender is an individual as opposed to a lending institution, additional documents will need to be included with the EB-5 application to demonstrate the lawful source of the individual lender’s funds, including 1) a capital source statement from the lender, 2) the lender’s past five years of individual tax returns if available and 3) other documents specific to the source of lender’s funds which can be found in other Source of Funds articles found on this website.