E1 and E2 Visa Loans
E1 and E2 visas encourage the facilitation of trade and investment between America and treaty nations, but this doesn’t guarantee access to credit or loans for the visa holder. All noncitizens have roadblocks placed in their way that make achieving financial independence difficult, even nonimmigrant visa holders with considerable resources.
E1 or E2 visa holders often still need access to credit so they can establish themselves in the country and build a life, and a personal loan is one of the best options. This article details the different types of loans and the steps visa holders should take when choosing a lender.
What is an E1 Visa?
The E-class visa is highly sought after by employers and prospective nonimmigrant visitors alike because it provides many of the benefits of permanent legal status and can be extended an unlimited number of times.
The E1 visa, known as the “treaty trader” visa, allows foreign nationals to stay in America for an initial duration of 2 years if their purpose is “solely to carry on substantial trade” (this 2-year period can be renewed indefinitely upon the expiration of the visa). There is no strict definition of what constitutes “substantial trade,” though typically this means at least 50% of the volume of trade completed by the visa holder’s employer must be between the United States and the treaty country. This trade can involve the exchange of physical goods and commodities or nonphysical services like banking or communication.
There are a number of conditions the applicant must meet to qualify for an E-1 visa, including:
- Employment by (or ownership of) a company that has the nationality of a designated treaty country (meaning the company is headquartered in this nation, or more than 50% of the business’ stock is owned by nationals of a treaty country)
- Citizenship in a designated treaty country
- The applicant must have expertise and involvement in international trade activity
- The applicant must provide proof to the American consulate that they will return to their country of origin once the visa expires
Immediate family members of E1 visa holders may also qualify for an E1 visa.
What is an E2 Visa?
The E2 visa, known as the “treaty investor” visa, is granted to individuals with significant financial resources who seek to invest substantial funds in an enterprise, business or practice in America. As with the E1 visa, the E2 visa is valid for up to 2 years, and can be renewed upon expiration an indefinite number of times.
The following conditions must apply to qualify for an E2 visa:
- Typically, the applicant must have a minimum of $100,000 to invest, though sometimes USCIS considers applications with as little as $50,000 in investment funds.
- The applicant must have a controlling interest in developing or operating the business or practice in question. This is usually done by demonstrating a 50% or more operating stake in the business.
- The application must pass a proportionality test, which involves weighing the invested amount against the total value of the enterprise to demonstrate that it is substantial.
- The investment must create a job for more than just the applicant; typically, an enterprise should employ 3-5 people to have the best chance of being accepted.
Immediate family members of E2 visa holders are also eligible for an E2 visa.
Why is it Tough for E1 and E2 Visa Holders to Get a Loan?
E1 and E2 visa holders are typically well-established financially in their home countries, and many are surprised to find that they still face major obstacles to getting a loan and building a financial profile in America. The first problem is that visa holders often don’t have a credit or financial history in America, and this history is what banks use to determine whether an applicant qualifies for a loan. Another problem is that loans are typically paid off over time in installments, and visa holders have strict limits on the duration of their stay in the country.
These concerns are smaller for those on E1 and E2 visas than most other visa holders, though, because of their financial resources. There are lenders who take other factors besides credit history in America into account, and E1 and E2 visa holders have a greater opportunity to build credit with the resources they have.
4 Best Options for E1 and E2 Visa Loans
Banks are perhaps the largest and most established lender that visa holders can choose from. The size and reputation of the banks make them a reliable option, but these factors also render them the least likely to accommodate the personal circumstances of the applicant. Though banks can be relied on to fulfill their obligations, they are often inflexible when it comes to the conditions of repayment.
Banks also typically have very high standards to qualify for a loan and are very conservative in how they estimate risk. These conditions exclude many applicants from qualifying for a bank loan, and those looking for a more personal touch in their financial dealings would best look elsewhere.
One way to improve the chance of being accepted for a loan without a credit history is with a loan pre-approval. Loan pre-approval is a service provided by financial institutions and lenders that involves screening the applicant’s occupation, income, and financial resources to determine the risk of disbursing a loan.
Obtaining a loan pre-approval will compensate for the applicant’s lack of a credit history, but applicants without a credit history are still deemed high-risk by banks. Also, a pre-approval often doesn’t help applicants get better terms or more flexibility in their loan.
For applicants with little chance of obtaining a loan from a bank, peer-to-peer lending can be a feasible option. Peer-to-peer lending sites allow borrowers to connect with smaller lenders competing with banks. These lenders are often less discriminating than the banks in their qualifications and offer more personalized, flexible terms for borrowers. However, peer-to-peer lenders are also much less formal, and inherently riskier because they lack the accountability that comes with larger institutions.
Online lenders are a good option for visa holders because, lacking the overhead and costs involved with operating a traditional bank, they often can offer better rates than traditional lenders. The stringent conditions and requirements of traditional banks have left a market for online lenders who target specific niches and demographics. While many online lenders will not tender loans to immigrants or foreign nationals, there are lenders that take more peripheral factors into account, and even lenders who focus specifically on immigrants and visa holders.
Online lenders are also typically smaller institutions than traditional banks with a much smaller pool of borrowers, so they often take greater care on a case-by-case basis and offer more personalized service as well.
E1 and E2 visa holders have more options than most immigrants and nonimmigrant visitors, but they still face discrimination and must overcome significant roadblocks to establish themselves financially in America. Access to credit is a big problem for all visa holders, and the challenge is in finding an institution that will consider more than just credit history when disbursing loans. D. Since E1 and E2 visa holders usually enter the country with considerable financial resources, flexibility in terms and personalized service are perhaps the most important considerations to make when choosing a lender.