IN THIS GUIDE · Assessing overdue customer orders in an E-2 business acquisition
Start with the E-2 eligibility and application overview
Classify the backlog before forecasting revenue
Separate signed orders, customer deposits, cancellable reservations and disputed commitments. Identify what has already been paid and which amounts the buyer may still collect. The same order should not be counted as both available cash and entirely future revenue. Ask the seller and accounting adviser to explain how the proposed sale allocates the obligations. Obtain the order terms, cancellation rights, delivery timetable and any customer correspondence before treating backlog as demand. The decision is whether the buyer is acquiring revenue, a liability, or both. A realistic forecast gives each amount one role and explains what happens if a customer withdraws or production costs rise.
Explain the investor’s transition responsibilities
Describe how the buyer will prioritize delivery, arrange supplies and manage customer communications. E-2 requires genuine development and direction, so the transition plan should identify actual decisions rather than a passive purchase of revenue. Determine which employees and supplier arrangements are available to perform the work; a sales ledger does not establish delivery capacity. Identify the decisions reserved to the investor, the authority given to a manager and any service provider's role. The investor must direct and develop the enterprise rather than merely hold a financial interest. If the plan relies on another person to operate it, the agreements should disclose that arrangement instead of implying personal day-to-day control.
Rebuild operating cash needs after closing
Existing customer deposits may come with obligations that require spending before new receipts arrive. Reconcile the purchase price, acquired cash, inventory and cost to complete orders. The investment must be substantial for this enterprise, committed and at risk, with lawful source and transfer evidence. There is no universal minimum that excuses an internally inconsistent budget. Trace the buyer's funds from lawful source through the commitment documents and identify the conditions under which money can return. Capital must be irrevocably committed in the circumstances and exposed to genuine commercial loss; a protected reserve is not the same as an investment. Decide whether any escrow condition is tied to approval rather than a device for avoiding business risk.
Use conservative assumptions for continuing capacity
An inherited backlog may be temporary, so distinguish finishing old work from generating sustainable new business. Assess non-marginality through realistic capacity beyond minimal family support or a significant economic contribution. Review treaty nationality and ownership separately. Neither an impressive order total nor a Canadian residential address establishes the full investor’s eligibility. Choose between a conservative forecast and an unsupported growth claim. The enterprise cannot be marginal, so the plan must show more than a means of support for the investor's household, unless it has a significant economic contribution. Nationality, ownership and the treaty-country connection must also be established from current corporate records.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.