It depends on capacity, not on current size. An enterprise is marginal if it lacks the present or future capacity to produce more than a minimal living for the investor and family, and future capacity within a reasonable period can be shown with a credible plan.
Capacity is provable; ambition is not
The marginality requirement is where small service businesses most often struggle, and the reason is usually evidentiary rather than commercial. A bureau with forty clients and modest billings can grow, but a case has to show how. What helps is granular: the acquired client list with revenue per client and retention history, the specific services to be added, the pricing, the staff to be hired with dates and salaries, and the resulting revenue by year. What does not help is a spreadsheet with a growth percentage applied to a single line. Hiring is particularly persuasive, because employing people is the clearest demonstration that a business does more than support one household. Where the numbers genuinely will not support more than a minimal living, that is worth knowing before money moves, and it is a reason to look at a different enterprise or a different route.
Hypothetical example: A Canadian citizen plans to acquire a bicycle-fitting studio in Oregon and employ two technicians after the first season. The first review should verify treaty nationality, the ownership of the enterprise, the signed expenditures, and a forecast showing that the operation will not merely support the investor. Purchase invoices, lease obligations, payroll assumptions, and local demand records are more useful than a single optimistic revenue total. The capital must be irrevocably committed and exposed to business loss; money that the buyer may freely reclaim is not at risk. A small studio can qualify, but it still needs an investment substantial for its actual cost and a credible path beyond a minimal living. Buying the business before testing those points can leave the investor with a commercial asset that does not support the intended classification.