Check Financial Statements Before You Invest in an EB-5 Project

Know Where Your Money is Going—Before You Invest

Before spending your hard-earned cash on an EB-5 project, it is important to evaluate the project’s financial well-being in accordance with its essential financial statements. Skipping this step is the equivalent of starting on a long road trip across the desert without checking your gas gauge—it’s risky, unnecessary, and totally avoidable.

Why Financial Transparency Matters

Financial statement review allows you to visualize how solid—and how risky—an EB-5 project is. It helps ask whether a project has enough assets, sound revenue, and good plan to finance its development, provide jobs and eventually pay back your investment. For EB-5 investors these numbers are not just data points but peace of mind.

Still, shockingly, the majority of EB-5 Regional Centers don’t seem to have financial statements readily available. Why? Often because:

• They’re not mandated to under USCIS or U.S. securities law for private placements.
• Investors don’t even know to ask for them.
• Some projects are too young to have financials — or the financials they do have might lay bare high debt, low equity or other red flags.

The Three Financial Statements That Matter Most

Even though project brochures may include architectural renderings and job creation forecasts, it is the balance sheet, income statement, and sometimes cash flow statement that provide a clear picture.

• Balance Sheet: Provides you with a snapshot of the assets, liabilities, and equity of the project. A good balance sheet indicates that a project is well financed and dedicated by ownership. Poor balance sheets can indicate excessive debt or insufficient capital—both investor red flags.
• Income Statement: Indicates whether the project is making enough revenue to meet its costs. If a project is far along but not producing any revenue, that’s a sign to look further.
• Cash Flow Statement: It shows you where money is coming in or going out, giving you a picture of liquidity and ability of the project to stay operational.

What You Should Be Asking

Before you invest, ask:

• How much equity does the project company and any guarantor hold?
• Are revenues being generated—or is the project burning through funds?
• Is there a repayment guarantee backed by a financially healthy entity?

Don’t Settle for Vague Promises

You should decline proposals from Regional Centers which fail to reveal financial statements and who avoid answering your financial inquiries. All investment-related information should be available to you as an investor. Investments through EB-5 create life-changing opportunities when conducted using clear financial reason.

Work with trusted experts

Managing EB-5 investments is complex, but you don’t have to do it by yourself. Dealing with experienced professionals—immigration attorneys, financial advisors, and registered regional centers—can make it a reassuring experience and reduce the possibility of costly mistakes.

Ready to invest in EB-5 wisely?

Whether you’re new to EB-5 or down to your last few project possibilities, we’re here to help. Call to schedule a consultation.