The forecast needs a credible connection with the business’s capacity and evidence.
Explain how the projection is achieved
Nonmarginality concerns capacity beyond a minimal living for the investor and family or significant economic contribution; projected capacity should generally be realized within five years of normal business activity. Identify the operating steps, resources and assumptions behind the numbers rather than relying on the endpoint alone.
Where a note is secured by the assets of the business being bought - its equipment, inventory, receivables or goodwill - that borrowed amount is not the investor's capital at risk, because the enterprise itself absorbs the loss on default. Go through every asset on the business's equipment or inventory list and match it to a bill of sale, lease, consignment agreement, or supplier contract that shows who actually holds title and what the investor paid or pledged. E-2 requires treaty nationality for the applicant and qualifying enterprise ownership, an irrevocably committed and substantial investment exposed to loss, a real operating business that is not marginal, and authority to develop and direct through at least 50 percent ownership or operational control. Each Canadian investor holds only twenty-five per cent, however, so each must independently show development and direction through documented operational control; the equal overall split does not establish that control by itself.