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info@AscendAmerica.com

 

Risk Mitigation

Virtually all EB-5 projects offer the same reward: Permanent Residency in the U.S. (“Green Card”)

At AscendAmerica we balance the developer’s need for low cost capital while safeguarding the EB-5 investor by keeping their risk exposure commensurately low.

Our experience in traditional finance uniquely qualifies us to design EB-5 investment structures that provide developers with access to the inexpensive capital they seek.  While they benefit from this structure, AscendAmerica also ensures that they accept terms which protect investors’ interests and significantly reduce investor risk.

RISK FACTOR: JOB CREATION

In order to advance from I-526 to I-829 approval, the EB-5 investment must be sustained and the project must create a minimum of 10 jobs per investor.

How AscendAmerica Mitigates This Risk:
  •  The investment is underwritten based on fundamental financial analysis first and job creation second
    • Our projects include a 250-500% job creation buffer.
  • EB-5 funds are “bridged” and therefore job creation begins prior to investment

RISK FACTOR: CONSTRUCTION

The majority of EB-5 investment opportunities involve construction which involves risk for project completion, specifically at the foundation and superstructure stages.

How AscendAmerica Mitigates This Risk:
  • The project commences prior to fundraising
  • In our EB-5 structure, funds are “bridged”
  • AscendAmerica works only with developers that have experience and a track record for successfully completing projects

RISK FACTOR: DEFAULT

With any construction project there is the risk of project failure and the possibility that Developer will not complete project and/or repay investors

How AscendAmerica Mitigates This Risk:
  • Developer invests 25-30% equity in the project so that they stand to lose more than EB-5 investors should they consider default

RISK FACTOR: REPAYMENT OR “EXIT STRATEGY”

With any EB-5 investment there exists the possibility that Developer will not complete project and/or repay investors, and a loan maturity date does not mean the repayment will definitely occur.

How AscendAmerica Mitigates This Risk:
  • Cash flow from operations is sufficient to repay investment and is captured in “Sinking Fund”
  • EB-5 investment is sized based on traditional and fundamental real estate finance metrics and, therefore, not over-leveraged
  • Does not rely upon rising market or stability in capital markets to achieve timely exit

RISK FACTOR: FRAUD

One of the biggest issues plaguing the EB-5 industry is bad actors. Investors and advisors must vet an investment opportunity to make sure the project and principals are legitimate.

How AscendAmerica Mitigates This Risk:
  • Project and stakeholders have been vetted by multiple broker-dealers and registered investment advisors
  • AscendAmerica is independent of developer and thus is free of conflict of interest and can capably serve as EB-5 investors’ representative and advocate
  • Banks involved in senior debt have conducted additional checks into RC principals and distribution channels

Testimonials

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