IN THIS GUIDE · A prospective buyer receives only unaudited financial statements
Start with the E-2 eligibility and application overview
Understand the scope of unaudited statements
Check who prepared the statements, the accounting basis, and level of assurance. Unaudited statements may be useful without independent audit verification. Compare related-party transactions, owner compensation, and one-time items against source records. Verify evidence requirements for the particular case rather than asserting that an audit could never be requested. Identify the date range each statement covers and whether cash, debt, inventory and owner withdrawals are shown consistently from month to month. A sharp result can be real, but the decision-maker needs the records that explain it before using that result in an investment or staffing projection.
Request the records that generated the numbers
Ask for U.S. federal and state tax filings, bank statements, merchant or point-of-sale reports, payroll registers, supplier invoices, accounts receivable ageing, the lease, and any licences or permits. Compare deposits against reported revenue for the same months. Where a category cannot be tied back to a primary record, treat it as unverified and say so plainly in your own notes rather than adjusting the assumption quietly. Hypothetical example: a prospective purchaser of a custom kite-sail design studio sees unusually strong sales in the seller’s spreadsheet. The review matches individual orders to deposits, delivery records and bank credits, then identifies cancellations that remain refundable. The decision is whether the stated purchase price and projected income rest on committed business rather than optimistic entries.
Decide where independent verification is worth paying for
Independent work usually focuses on revenue verification, liabilities that could follow the business, employment and tax compliance, and the condition of assets you are buying. A quality-of-earnings review, a lien search, and a lease assignment review are common examples, not requirements. Choose scope by the size of the risk, and keep the results in writing so the file shows why the price was accepted. Decide in advance which issue would change the transaction: an undisclosed debt, an expiring lease, a tax exposure, or a revenue source that cannot be corroborated. Put that decision in the purchase terms where appropriate; due diligence is most useful when it can still affect the commitment of funds.
Connect due diligence to the investment argument
Verified records support two separate points: that your capital is substantial relative to the real cost of this enterprise, and that the business can generate more than a minimal living or make a significant economic contribution. Purchase price alone establishes neither. Where diligence changes the numbers, revisit the projections and the funding plan together, and confirm your own capital's lawful source and full path. Canadian citizens generally need an E visa, so allow for that step in the plan. Keep the source-of-funds trail separate from business due diligence. The fact that a seller’s records are credible does not show where the investor obtained the purchase money, and a clean personal bank trail does not prove that the acquired enterprise will satisfy the non-marginality analysis.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.