Repay existing project financing with EB5 Capital (Bridge Financing)

This article describes what Bridge Financing and Repayment is, how to request Bridge repayment using EB-5 funds with the Support of PRXY, and how to manage a few additional scenarios. If you have any questions, we encourage you to reach out to your attorney to discuss first.

What is Bridge Financing?

Bridge financing is short-term funding that a developer uses to keep a project moving while waiting for permanent or long-term financing—such as EB-5 capital—to become available.

In large-scale construction, it’s common for developers to need cash upfront to start work (for example, paying contractors, securing permits, or covering early construction costs like site work and planning). Raising EB-5 capital can take time due to marketing momentum, investor source and path of funds complexities, investor onboarding and regulatory requirements, so developers often use temporary, short-term, loans or equity contributions to “bridge” the time gap between when EB5 capital is needed and when it ultimately becomes available.

USCIS’ logic behind allowing EB5 money to be used to repay short-term financing is that there is a job creation nexus between the temporary money used to finance the project and create jobs now and the anticipated long-term EB5 capital that will ultimately swap out the existing short-term capital later. To create a sufficient job creation nexus, appropriate documentation must exist. 

The two types of Bridge are treated differently: 

Bridge Equity
Bridge equity occurs when cash or other contributions of value (like land or assets) are put into a project temporarily with the expectation they will be repaid later by long-term funding such as EB-5 capital.

• This can be a developer advancing early equity (often informally documented), or
• A third-party investor providing short-term equity (like preferred equity) that is meant to be taken out once EB-5 money arrives.
• The “bridge” is the gap between when the equity is contributed and when it is reimbursed.

Bridge debt is a short-term loan used to fund project costs until permanent financing—such as EB-5 capital—is available.

• It is documented through a loan agreement and functions like any other loan.
• EB-5 funds can later be used to pay off this short-term loan if the loan proceeds were used for eligible project expenditures.

Can EB-5 funds be used to repay Bridge Financing?

Yes. However, this strategy requires formal documentation (e.g., a bridge loan agreement, a corporate resolution, a promissory note, or other financial or corporate device) created contemporaneously with the original bridge facility to prove that the developer intended to treat the existing form of financing as temporary/short-term in nature, which is critical for USCIS compliance. There is also additional criteria to keep in mind:

1. Bridge Financing Repayment should be discussed and disclosed explicitly in your PPM, providing up-front visibility to investors that their investment capital may be used to replace existing or anticipated short-term financing at the Project level. 
2. The alternative financing was temporary or interim in nature as evidenced by documentation.
3. It was intended to be replaced by long-term or EB-5 financing as evidenced by documentation.
4. It was obtained before EB-5 funds were deployed to the JCE.

It’s important that projects contemplate, and document, EB-5 funds as a legitimate bridge financing pay down mechanism (if that is the intent), so that any such pay downs are not seen as a "backdoor" payment by USCIS. This is essential for tracking the chain of custody of EB5 money at the I-829 stage.

The PRXY Process

Because PRXY helps ensure that all disbursements are USCIS-compliant, any request to repay Bridge Financing will go through a review process and in some cases may require confirmation from your counsel. This process ensures that your project’s use of EB-5 funds remains compliant and avoids future issues during investors’ I-829 filings.

Step 1: Determine if Bridge Financing Repayment is needed 

Ask yourself:

1. Am I repaying a previous expense with EB-5 capital? OR
2. Am I using EB-5 capital to pay an unpaid, due expense?

If your answer aligns with Option 1, this would require Bridge Financing Repayment → Please review Steps 2 - 4 below.  

If your answer aligns with Option 2, you can submit as a regular EB-5 Draw Request. This is the simpler, quicker process. See How to use the Drawdown & Spending Tab.

Step 2: Confirm that your documents discuss the use of Bridge Financing 

Three things must be evidenced in order to use EB5 to repay bridge financing.

1. The offering documents appropriately disclose the use of investor capital to repay bridge capital at the project level.  
2. Corporate or loan documents at the project level adequately demonstrate that short-term financing exists and it is intended to be repaid with EB5 capital. 
3. The bridge capital was spent on project expenditures in accordance with the budget and business plan. 

As a first step, review your PPM for language that outlines the stipulations (an easy way is to search for the term ‘bridge’ within your document). A section that contemplates the use of Bridge Financing typically outlines 1) that it has been contemplated from the outset of the project and 2) guidelines for the use of investor funds, such as the full $800,000 must be received prior to use. 

Step 3: Submitting Bridge Financing as Project Spend

If you confirm that Bridge Repayment is allowable, the next step is to record Bridge Financing in the PRXY Portal. This is outlined simply below, but see the 'What is a Project Spending Report' section of How to use the Drawdown & Spending Tab for a more robust overview.

1. Go to the ‘Drawdowns & Spending’ Tab in the PRXY Portal.
2. Select ‘Record Project Spend’ – this is the tool used to record previously paid expenses, including Bridge Financing. 
3. Submit a log of spend as Bridge Financing along with evidence. Review Best Practices for project spending documentation for guidelines on what is and is not acceptable forms of evidence. 
4. Wait for PRXY’s feedback and confirmation before proceeding with the New EB-5 Drawdown Request submission and wire.

Step 4: Submit a New EB-5 Drawdown Request for Bridge Financing Repayment

Once you have confirmed that Bridge Financing Repayment is permissible (Step 2), and you have logged the spending (Step 3), you can submit a request to repay it. 

1. If you use escrow, complete Escrow release with a Written Direction/Disbursement Form and move funds from Escrow to the NCE. See .Breaking Escrow in Advance of an EB-5 Draw.
   1. Note: this process will take 1-2 business days as long as all of your investor documents are in place. 
2. Go to the Drawdown & Spending’ Tab in the PRXY Portal. 
3. Submit an EB-5 Draw Request. Since you previously reported the use of Bridge Financing and expenditures, this should be a Bridge Repayment (see the last expenditure option). See the 'What is an EB5 Drawdown Request?' section of How to use the Drawdown & Spending Tab for a more robust overview.
   1. Note: You do not need to re-submit invoices at this stage, but the amount should match.
4. Upload documentation depending on the kind of Bridge you have employed: 
   1. Bridge Debt → Bridge Memo, loan agreement or promissory note. 
   2. Bridge Equity →  A corporate resolution of some kind, a preferred equity agreement or terms from an operating agreement 
      1. As an alternative, you can submit a Bridge Repayment Attestation Form as proof, generally supplied by your legal counsel or find a template here. This is a signed letter confirming that your counsel has reviewed the evidence and determined the repayment is compliant with USCIS policy.
5. Wait for PRXY’s feedback and approval before proceeding with the wire transfer. If all previous steps have been successfully completed, this is typically done same-day on business days. 

Additional Scenarios 

USCIS requests an RFE

To determine whether repayment of Bridge Financing is compliant, USCIS reviews the facts and intent at the time the bridge funds were incurred. A strong response to a USCIS inquiry (RFE) typically includes:

• Offering Documents (e.g., PPM) that disclose bridge financing and state EB-5 funds may be used for repayment.
• Evidence showing the financing was short-term, such as:
  • Internal emails indicating intent to repay with EB-5 capital
  • Board resolutions referencing EB-5 repayment
  • Bridge loan documents or recitals mentioning EB-5 repayment
  • Legal memos or affidavits confirming intent at the time