Physical asset components such as equipment, property, cash, cash equivalents and inventory. Capital in reference to EB-5 means the investment including inventory, equipment, cash, cash equivalents and indebtedness. It also means the physical and intangible property obtained and secured by the primary applicant and invested into the business endeavor as stipulated by the EB-5 program. Capital also alludes to indebtedness, inventory, cash, cash equivalents, equipment and other physical property obtained using assets that belong to an alien entrepreneur. However, the alien entrepreneur must take personal and primary liability and ensure assets of the new business venture that the application is based on is not used to absorb any indebtedness. Fair market value in the US is used to value all capital. In accordance of § 203(b)(5) of the Immigration and Nationality Act (INA); assets obtained directly or indirectly via prohibited methods, for instance criminal activities, will not be considered capital. Simply put, EB-5 investors should not use any promissory notes and invest the full qualifying amount themselves. However, the EB-5 program allows for investors to take a loan from banks and using personal possessions such as costly jewelry, real estate properties, etc., as security. Using the specific business they intend to invest into as collateral for the loan is prohibited.
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