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OTONABEE-SOUTH MONAGHAN · EB-5 FIELD GUIDE

Can an Otonabee-South Monaghan couple count a vendor take-back mortgage toward EB-5 capital?

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THE DIRECT ANSWER

Not as an unpaid receivable. Capital must be invested, and money still owed under a mortgage from a farm sale has not yet been received or placed at risk.

A promise of future payment is not capital

Hypothetical example: EB-5 measures capital that has been invested or is actively in the process of being invested in the new commercial enterprise, and placed at risk for the purpose of generating a return. A vendor take-back mortgage is an asset on the family balance sheet and it may well be excellent security, but until the instalments are received the money is not available to commit. Two consequences follow.

First, calculate what is genuinely in hand: the cash portion of the sale, existing savings, machinery auction proceeds and any other liquid assets. If that total does not reach the applicable threshold, filing early does not help. Second, if the couple intend to borrow against the receivable, the loan is only qualifying capital where the investor is personally and primarily liable and the loan is not secured by assets of the enterprise itself.

Both points should be settled with an accountant and a lawyer before a project is selected.