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A Rothesay couple buying a U.S. heating and cooling service company have agreed a price of which forty percent is a promissory note to the seller secured on the business. E-2 counts only funds irrevocably committed and at risk by the investor; a note secured on the enterprise's own assets is the seller's risk, not theirs. The cash portion, if committed and traced, is the investment, and its substantiality is measured against the business's full cost.
Separate the cash from the note
Hypothetical example: a Rothesay heating technician and his wife are buying an established U.S. service company with a fleet of vans and a dozen technicians. Sixty percent of the price is cash from selling their Canadian business; forty percent is a five-year seller note secured by a lien on the company's vehicles and receivables. The cash, once paid or placed in visa-conditioned escrow, is at risk and counts. The seller note, secured on the business's own assets, is not their personal risk, because on default the seller recovers from the business rather than from them. If the note were instead secured on their personal assets, with personal liability, the borrowed funds could count. The structure of the note therefore changes the immigration analysis and should be negotiated with that in mind.
Test substantiality against the whole cost
The substantiality test compares the amount invested with the total cost of purchasing the enterprise. With a cash portion of sixty percent of the price, the couple should be prepared to show that proportion is substantial for a business of this value and that the enterprise can operate on it. A larger cash proportion, or a note secured personally, makes the case stronger. The couple should also show that the cash is traced from the sale of their Canadian business through their accounts to the escrow, with the Canadian closing statement, bank statements and wire confirmations. Funds set aside for working capital should be tied to a budget for the first months and placed in the business account.
Show an operating, non-marginal enterprise that they direct
An established company with twelve technicians is real and is not marginal; its payroll should be documented from the seller's records. The husband should be identified as the principal investor who will develop and direct the business, and the plan should describe his operational role, his supervision of the technicians and dispatchers and his own trade credentials. His wife is an E-2 spouse employment-authorized incident to status and may run the office or work elsewhere. Ownership by the couple satisfies the requirement of at least fifty percent Canadian ownership. They should be told that E-2 provides no direct path to permanent residence and that renewals depend on the business continuing to qualify, so the seller note's repayment schedule should not starve the business.
What else is on your mind?
Is there one minimum investment that guarantees E-2 eligibility?Is holding money or owning an asset enough for E-2?Editorial source review: 2026-09-07. General preparation guidance, not an individual assessment.