IN THIS GUIDE · What to ask the seller before a South Frontenac buyer puts money into a U.S. equipment dealership
Start with the E-2 eligibility and application overview
Ask the seller for the dealer agreements before the financials
An equipment dealership's value sits in its manufacturer dealer agreements and its service reputation, not in its shelves. Ask whether the agreements transfer on sale, whether the manufacturer must approve the new owner, and what happens to warranty work in progress. If a manufacturer can refuse the buyer, the enterprise the couple think they are purchasing may not exist after closing, and the immigration file would describe a business that cannot operate. Make manufacturer approval a closing condition and keep the correspondence. Read termination, renewal, and territory clauses with the same care as price. A dealership without transferable authority may be an inventory purchase rather than an operating enterprise.
Establish what the business earns beyond the owners' living
The enterprise must not be marginal, meaning it should have the present or future capacity to generate more than enough income to support the investors and their family, or to make a significant economic contribution such as employing others. Ask for three years of financial statements, the parts and service revenue split, seasonal cash-flow patterns and the payroll for the mechanics. A shop that supports the retiring owner alone may still qualify if the buyers' plan credibly shows growth or hiring, but that plan needs numbers, not adjectives. Test the forecast against payroll, signed work, and equipment capacity. The question is whether the enterprise can support the plan, not whether the narrative sounds ambitious.
Commit the funds in a way that is real but not reckless
The investment must be irrevocably committed, which is why funds sitting in the buyer's Canadian account do not count. Funds held in escrow that release only on visa issuance are a recognized way to commit money while protecting the buyer if the application fails; have the escrow terms drafted with that in mind. The amount must be substantial relative to the total cost of the dealership, and it must be the couple's own lawful money or borrowed on their personal credit rather than secured only by the business they are buying. Keep the escrow instructions with the purchase agreement and proof of payment. Their exact release conditions explain both the exposure to loss and the buyer's protection.
Decide who directs the business
E-2 requires the investor to develop and direct the enterprise. A couple buying jointly should decide which of them is the principal investor and will hold the E-2 role, with the other as the E-2 spouse, who is authorized to work incident to status and can therefore work in the shop as well. The ownership records must show the Canadian investor with at least fifty percent or operational control, and any U.S. minority partner or lender must not have rights that amount to control. Compare shareholder rights, lender covenants, and management agreements before selecting the principal investor. Control must exist in the documents, not merely in the family's expectation.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.