EB5 Investors Magazine - Page 15

enough collateral and equity available over and above the senior loan to minimize the risk factor of the senior loan default. The “capital stack” must be clearly disclosed in detail in the offering documents. There should be a clear delineation on a percentage basis as to all the funding sources, including the developer equity, EB-5 funding, the senior indebtedness and other types of incentives that may either be superior or subordinate to the EB-5 financing, such as new market tax credit, other governmental credit, governmental grants, or similar types of support to the program that add capital to outfit the cost of the project. Identify unique risks of a specific project It is not sufficient to provide generic risk factors that do not otherwise take into account the specific risk factors that are unique to the project in question. By definition, each project has unique risk factors that need to be addressed, which take into account the following factors: 1. Nature of the industry. Specific risk factors that are unique to the industry of the project need to be analyzed. For example, a hotel project would have unique risk factors related to the hospit