IN THIS GUIDE · Borrowed money and the at-risk rule in a greenhouse-nursery purchase
Start with the E-2 eligibility and application overview
Which dollars are at risk and which are not
Funds count toward the E-2 investment when they are the investor's own or borrowed on the investor's personal liability with the investor's own assets as security, and when they are irrevocably committed to the enterprise so that they are subject to partial or total loss if the business fails. A mortgage on the couple's Kent home meets that description. A loan secured by the nursery's greenhouses, vehicles and stock does not, because the lender's recourse is against the business rather than the investors. Ask the bank to structure the financing so the qualifying portion is clearly identifiable. Assess proportionality against the actual cost of acquiring or starting this particular enterprise, not against a number borrowed from another case. The purchase agreement, seller financials, equipment quotations and opening budget are the records that allow that comparison. A lower-cost enterprise can require a high proportion of its total cost to be committed, even where the absolute amount is modest.
Substantial relative to this business, not to a number
There is no fixed minimum. The investment is weighed against the cost of establishing or purchasing this nursery, and a lower-cost business is expected to be close to fully funded by the investor. A purchase where the couple's at-risk contribution covers most of the price and working capital is easier to present than one where an enterprise-secured loan covers half. Show the purchase agreement, the escrow arrangement, the equipment and inventory valuations and the source of each contribution. At-risk treatment turns on the structure of the debt and the transaction, not on the label used by a lender. Trace the collateral, repayment obligation and release conditions from signed documents. A loan secured only by the assets of the business being acquired can leave the investor without the required personal exposure; a different structure still requires careful proof of where the funds came from and how they were committed.
Not marginal, and actually directed by the investors
The nursery must have the present or future capacity to generate more than a minimal living for the couple, typically shown through staffing beyond the household and a projection that reaches that point within five years. The couple must develop and direct it, ordinarily by owning at least half or holding operational control. Retaining the seller as a hired manager is acceptable provided the investors hold the decision-making authority. A five-year forecast should connect projected revenue to identifiable customers, market assumptions, staffing and expenses. The decisive issue is whether the enterprise has a credible path beyond supporting the investor's household, not whether the owner can draw an initial salary. Explain any seasonal period, seller transition or delayed hiring rather than presenting a smooth forecast that the operating documents contradict.
Nationality, family and the road ahead
Both investors must be Canadian citizens and the enterprise at least half Canadian-owned; a spouse with only permanent residence would not carry the treaty nationality. An E-2 spouse is employment-authorized incident to status, so both can work in the nursery. Children may study until twenty-one but not work. E-2 status renews while the business operates and does not itself lead to permanent residence. Nationality must be checked for each owner before funds move. A lawful Canadian permanent resident who is not a Canadian national does not acquire treaty nationality through residence, and an ownership structure can affect the enterprise's nationality as well as the individual's eligibility. Passport evidence and ownership records should therefore be reviewed together, before the deal becomes difficult to unwind.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.