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CENTRAL SAANICH · E-2 FIELD GUIDE

Should I spend the entire reserve simply to show more receipts?

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THE DIRECT ANSWER

The case should reflect a sound actual business arrangement and qualifying commitment, not artificial spending to create a larger receipt pile.

Assess purpose as well as amount

There is no universal E-2 minimum. Review capital risk and the operating plan with the real obligations; unnecessary spending cannot cure missing ownership, directing authority or nonmarginality.

There is no single published E-2 dollar threshold, so the budget must be analysed in relation to the cost of the particular enterprise. Start with the actual purchase price or start-up cost, then separate capital already paid or irrevocably obligated from contingent ideas and from personal living expenses. The first review should identify whether the spending creates a functioning business, supports credible operations, and leaves the applicant with control and direction. Spending merely to increase a total is risky if the purchases are unnecessary or reversible. Fees, rent, inventory, equipment, and payroll can each be relevant, but their legal weight depends on the transaction terms. The investment must be irrevocably committed and exposed to commercial risk, and the enterprise cannot be marginal. Hypothetical example: a piano-tuning business buys an expensive delivery van before it has clients, although tools and a small workshop would meet the operating need. The signed customer agreements, lease, and equipment invoices are more informative than the van’s price. The investor must decide whether the purchase genuinely supports the business or simply inflates the claimed investment.