The definition of a troubled business is one that has existed for a minimum of 2 years. Furthermore, this business must have incurred a net loss for the 12 to 24 month period before you file Form I-526.

This loss must be equal to at least 20 percent of the business’s total net worth.

General Requirements for Investing in Troubled Businesses
Invest in or currently be in the process of investing $1,000,000, or $500,000 if the business is located in a TEA.

Maintain at least 10 jobs before you invested money for at least 2 years. This means that the investor must show that the number of existing employees in the troubled business is being or will be maintained at no less than the pre-investment level for a period of at least 2 years. This regulatory provision, while allowing job preservation in place of job creation, does not decrease the statutory numeric requirement. Ten jobs must be preserved, created or some combination of the two. For example, an investment in a troubled business that creates six qualifying jobs and preserves all four pre-investment jobs would satisfy the statutory and regulatory requirements.

Must be involved in the daily management of the company. Acceptable positions include acting as a corporate officer, board member, etc.