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COLWOOD · E-2 FIELD GUIDE

Should a budget count all promised partner money as available cash?

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THE DIRECT ANSWER

Distinguish funds actually available from a future obligation and assess the operating plan on that basis.

Make dependencies visible

A cash-flow forecast should identify timing and conditions. There is no universal E-2 minimum, but an unsupported funding assumption cannot establish a viable nonmarginal enterprise.

Identify which costs are actually part of the investment analysis and which are unrelated preparation expenses, and review refund and cancellation terms rather than assuming every dollar spent helps eligibility. The valuable work here is judgement: reading the refund clause, deciding which payments count toward the committed total, and testing whether the revised plan still supports a non-marginal enterprise. If part of the price is borrowed, the structure matters: debt secured against the business assets is treated differently from borrowing for which the investor is personally liable, and the distinction affects whether the funds count as at risk. The purchase price held in escrow on visa-conditioned terms, funds already spent on equipment or inventory for the business, and working capital transferred to the business account and committed to operations all count. The comparison is between the amount invested and the cost of the enterprise in question, so an investment representing a large fraction of what the business actually costs is more persuasive than a larger absolute sum representing a small fraction of an expensive one.