Terminology

AMERICAN OPPORTUNITY FRANCHISE FUND IV

This is the entity into which the investor pays the $500,000 which is held in an escrow account and then becomes the collateralized senior secured loan to the multi–unit Dunkin operators.

COLLATERALIZED LOAN

Collateralized Loan obligations (CLOs) are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches.

ESCROW

An escrow is a financial instrument held by a third party on behalf of the other two parties in a transaction. The funds are held by the escrow service until it receives the appropriate written or oral instructions or until obligations have been fulfilled.

GREEN CARD

Greencards is a permit allowing a foreign national to live and work permanently in the US. Employment-Based fifth preference visa is also known as the Green Card.

USCIS 

Also known as the U.S. Citizenship and Immigration Services which is the federal agency that oversees lawful immigration to the United States and issues the Green Cards.

VISA PETITION

This is the visa application process to the USCIS.

I-526 PETITION

This is the first form in the visa petition process. (Costs: $1,500)

I-829 PETITION

This is the final step of the EB-5 visa process (Costs: $3,750 + $85 biometric fee).

REGIONAL CENTER

A 3rd party-managed investment vehicle (private or public), which assumes the responsibility of creating the requisite jobs for the EB-5 program. The investor’s administration fee is paid into this company.

TARGETED EMPLOYMENT AREA (TEA)

A Targeted Employment Area or (TEA) is defined by federal immigration regulations as either a rural area or an area with above average unemployment. The $1,000,000 investment threshold can be reduced to $500,000 if the EB-5 project is located in a TEA area.

SENIOR SECURED LOANS

Senior secured loans sit at the top of the capital structure and are the first to be repaid — generally before junior debt or equity investments. The word “secured” indicates that the loans are backed, by a company’s assets such as inventory, property, equipment and real estate.

MEZZANINE (SUBORDINATE LOANS)

Mezzanine financing is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is generally subordinated to debt provided by senior lenders such as banks and venture capital companies.

LLC

A limited liability company (LLC) is the United States-specific form of a private limited company.

LP

Limited partnership (LP) is two or more partners united to conduct a business jointly, and in which one or more of the partners is liable only to the extent of the amount of money that partner has invested.