Third party loan administration is a best practice for EB-5 and is commonplace in similar types of investments.
In many EB-5 loans, the New Commercial Enterprise and Job Creating Entity — the lender and the borrower, respectively — are controlled by the same or related parties — called a related-party transaction.
Many consider these transactions at higher risk of fraud or mismanagement — investors may be wary, and the SEC subjects these transactions to a higher degree of scrutiny.
Using a third party EB-5 loan administrator introduces additional controls against misuse of funds, reassuring regulators and investors, and can provide the tracking and reporting capabilities needed to prove a project is compliant in the case of an SEC investigation.
To learn more about best practices for EB-5 loan servicing, register for NES Financial’s webinar, Preparing for I-829 Success: Best Practices in EB-5 Loan Administration.
What is EB-5? Find out more by downloading our EB-5 Solution Kit.
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