Bridge Financing for EB-5 Projects

Bridge financing is the use of a short-term loan or equity infusion to advance a development project until the project can secure permanent financing to carry the project to completion. In the EB-5 context, a senior construction loan has typically been secured by the time the EB-5 capital raise has begun, but construction cannot begin because the EB-5 funds are needed to begin construction. The project managers therefore “bridge” the period from the beginning of the EB-5 raise to the commencement of construction by obtaining a short-term loan or contribution of equity to move the project forward. This allows projects to significantly de-risk the construction by advancing construction beyond the early phases of construction where historically most construction delays occur (permitting problems, financing problems, labor problems, material problems, etc.).  Under the 5/30/2013 EB-5 Adjudications Policy Memorandum (since updated by the USCIS Policy Manual), the USCIS stated that EB-5 funds can be used to replace bridge financing long after construction has begun, and the EB-5 investors will get credit for all jobs created by the bridge financing.

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