Current losses do not by themselves answer every E-2 question, but they require a credible, supported explanation of future capacity. The enterprise must satisfy the non-marginality standard and the other investment and control requirements.
Evaluate the recovery mechanism
Explain why the losses occurred, what changes the investor will implement and which evidence supports improved results. Budget the time and capital needed for those changes. A new business plan cannot erase unreliable records or an unchanged operating problem.
Review the proposed transaction and recovery assumptions together rather than assuming a low purchase price makes the case easier. Ask what the recovery period will require from the household, because that is the part a purchase price never shows. Hypothetical example: an investor acquires a loss-making assistive-device distributor and the plan assumes eighteen months before dependable receipts.
Through that period the family needs accommodation, schooling and health arrangements funded from somewhere other than the business. Explain why the losses occurred, what the investor will change and which evidence supports improved results, then set the household budget against that timetable rather than against the closing date. The enterprise must satisfy the non-marginality standard alongside the other investment and control requirements, and a low purchase price does not make that easier to show.