Banking, financing and investing professionals have “best practices” when it comes to deciding what projects or businesses to fund. At a high level, they assess…
- What is the project’s probability of success (as presented in a business plan) and,
- What are the protections if something goes wrong?
This is the first in a series of posts that attempt to help EB-5 investors better understand the key elements that determine whether an investment in an EB-5 project is: safe, secure and predictable.
Credit analysis or risk assessment is a proven methodology that lenders employ. Conducting credit analysis or risk assessment on a project without a reference to follow is like having puzzle pieces in a box – with no reference picture to look at. Wouldn’t that be frustrating!
Using best practices from the professional banking and investment communities can provide the puzzle picture for EB-5 project investing. You still have to put the puzzle together, but you at least know what the picture should look like.
To start our EB-5 project best practice process discussion, I offer that there are at least 27 puzzle pieces that fit into seven major groupings. Four of the groupings help assess the probabilities of success. The other three groupings measure the protections in case something goes wrong.
If understanding EB-5 project risk is important to you, please read the following daily blog posts at Education Fund of America’s blog below. We also invite you to visit our Learning Center, and please contact me at any time for questions. Thank you!
Gregory Wing is the Founder and Managing Partner of Education Fund of America. He is also President and CEO of Bedford International, a firm that in the last 20+ years provided more that $5 billion in loans and investments into businesses located in all 50 States.