Money and structure

Unsecured loan

Also called unsecured third-party loan, unsecured borrowing.

An unsecured loan is borrowing that pledges none of the investor's own assets, and its cash proceeds can fund an EB-5 investment: since Zhang v. USCIS the collateral test in 8 CFR 204.6(e) reaches only a debt instrument contributed to the enterprise, not lawfully obtained cash that the investor happens to have borrowed.

What it decides

USCIS treated invested loan proceeds as indebtedness needing collateral from a stakeholder announcement on 22 April 2015 until 30 November 2018, and the Policy Manual records that date, the date of the district court decision in Zhang, as the day it stopped. For petitions filed on or after 15 March 2022 the statutory definition of capital is cash and tangible assets owned and controlled by the investor, with no collateral condition attached to cash. What replaced the collateral test is a bona fides test: for petitions filed on or after 14 May 2022 borrowed funds count only if the loan was made in good faith and not to circumvent the limits on permissible sources of capital, and if the lender is not a bank the petition must carry the lender's own records, seven years of tax and business records plus the judgment evidence. Two limits survive. A loan from the investor to the new commercial enterprise is not a contribution of capital at all, and a promissory note contributed as capital must still be secured by the investor's own assets.

Governed by 8 U.S.C. 1153(b)(5)(D)(ii) and (b)(5)(L)(iii), the latter added by Public Law 117-103, div. BB, section 103(b)(1) and effective 60 days after enactment under section 103(b)(2), that is 14 May 2022; 8 CFR 204.6(e); Zhang v. USCIS, 344 F. Supp. 3d 32 (D.D.C. 2018), aff'd 978 F.3d 1314 (D.C. Cir. 2020); USCIS Policy Manual, 6 USCIS-PM G.2(A)(1), (A)(2) and (A)(4), page current as of 5 August 2026, which carries the 30 November 2018 cut-off at footnote 14 and the gift and loan conditions. The eCFR print of 204.6(e) is the vacated 2019 wording and is unreliable for other paragraphs, but the capital and invest definitions relied on here are unchanged from the version USCIS applies.

Where this is explained properly

Pages here that go into unsecured loan rather than mentioning it.

Using Gifted or Loaned Funds for EB-5: What’s Allowed and What’s Not

Related terms

CapitalCapital is the cash and tangible assets an EB-5 investor contributes to the new commercial enterprise. Two texts define it: the statute, which governs petitions filed on or after 15 March 2022, and the older regulation, whose conditions on debt USCIS still applies alongside the statute.
Secured indebtednessDebt that the investor is personally and primarily liable for and that is secured by the investor's own assets, which counts toward the EB-5 capital requirement only when the debt instrument itself is what goes into the enterprise, not when the investor contributes cash borrowed against those assets.
Zhang v. USCISZhang v. USCIS is the class litigation that ended USCIS treating an EB-5 investor's invested loan proceeds as indebtedness requiring collateral: the district court set the denials aside on 30 November 2018 and the D.C. Circuit affirmed on 27 October 2020, holding that cash in 8 CFR 204.6(e) includes the proceeds of third party loans.
Borrowed fundsBorrowed funds are money an EB-5 investor is lent and then contributes as capital. Since Zhang v. USCIS, USCIS evaluates invested loan proceeds as a cash contribution, not indebtedness, so the loan need not be collateralized, but for petitions filed on or after 14 May 2022 the statute counts them only if the loan was made in good faith and not to circumvent the limits on permissible sources.
Source of fundsSource of funds is the documentary showing that an EB-5 investor's required capital, and the money used to pay administrative costs and fees, was obtained from a lawful source and through lawful means, proved by records rather than by assertion.

Checked against primary sources on 10 August 2026. Back to the glossary