Advancing construction while awaiting EB-5 funding allows EB-5 project managers to substantially de-risk the project by limiting to the time duration and scope of the future risk scenario. This is because most problems that stop or slow down a project occur in the design and drawing phase or in the very early stages of construction (there may be permitting, zoning, labor, material or financial problems yet to deal with). Most EB-5 projects are offered to investors during the design phase. Other projects use bridge or equity financing to advance project construction and thereby reduce risk to investors. Another advantage is that the financial analyst doesn’t have to look as far into the future when projecting future cash flows from the project. It’s a lot easier to estimate cash flows for a project that will be operational in six months than it is to assess likely cash flows two years down the road. A lot can happen in those two years!

An I-924 “exemplar petition” is often filed by the regional center at the very beginning of the project offering. It is essentially an early I-526 petition without a petitioner. Only the project documents for a petition are sent to the USCIS with the hope that the Service approves the exemplar. If the USCIS approves the exemplar, then the project is approved for all subsequent I-526 petitions UNLESS the project managers make a “material change” to the project and/or its documentation. So, an I-526 petitioner filing based on an investment in an exemplar-approved project can only see his I-526 petition denied if 1) the project undergoes a material change (this is rare), or 2) there is a defect or deficiency in the petitioner’s source and path of funds part of the petition.