When we are talking about the investment being “substantial,” there are a couple of other things to mention: The applicant/investor is required to be investing his or her own personal funds, but he or she can obtain those funds as a gift or a loan. Additionally, the funds have to be what is called “irrevocably committed,” or “at risk.” An applicant cannot just put the money into an escrow account and say “I’m going to use it in the future.” He or she has to do something with the money so that it is at risk of partial or total loss should business fortunes collapse.
Q: Let’s say I’m a Philosophy Professor by trade, but I’m going to retain the old staff and the old owner of a shop, as employees, would that satisfy the requirement that I “know the business?”
A: It may. This is not black letter law, it is a fairly subjective, grey area. If the officer thinks that you’re going to be able to direct and develop it, then you will be issued the E-2 visa.
Q: If I come to the United States from another country, and I get a bank loan with the restaurant assets as collateral, is that considered a substantial investment?
A: No. You are not allowed to use the assets of the E-2 entity as collateral for a loan. You have to use your own personal assets as collateral for a loan, because then the money is considered at risk. If you use the assets of the business as collateral for a loan to start the business, the money isn’t really at risk.