A marginal business is one that makes only a small profit, breaks even, or just earns enough to stay afloat. The exact meaning can vary by context, but financially it often means low profit margins, weak cash flow, limited growth potential, and cushion for unexpected expenses. 

For example, with $250,000 in revenue and $245,000 in expenses, a $5,000 net profit is just a 2% margin. Adjudicators may call this marginal because there’s little room for error, most profits are taken by the owner, cash reserves are low, or its performance fluctuates, making success risky if revenue drops. 

Marginal businesses often have weak recurring revenue, poor customer retention, inconsistent earnings, and limited transferable value, leading to lower valuation multiples. For example, in the pool service industry, a company managing 93 pools with $215,000 in annual revenue but only $10,000 in profit would fit this description, this is the most common reason for E2 Visa denial.

However a pool company with 93 pools, annual revenue of $215,000, net profit between $70,000 and $90,000, strong customer retention, and recurring monthly contracts would generally be seen as a healthy small business rather than a marginal one and has a much better chance of E2 Visa approval.