The Quick Read: If you own only 25% of the entity, a bank statement cash-out refinance can still work, but the lender counts only your prorated share of the business income after an expense factor, so the file often rests on how you document ownership, which statements you use, and which lenders in a wholesale network will write it. No single provider is best for everyone. The best program for your situation depends on your deposits, the property, your credit profile, and how much cash you want out.
- Business statements are usually prorated to your ownership share. Personal statements often skip that step.
- A 25% stake is a common minimum for business statements, but the exact floor sits on each lender’s program sheet.
- Cash-out leverage depends on occupancy. It runs up to 80% LTV on a primary residence, up to 75% on a second home, and about 75% on an investment property.
- If your prorated income is thin, a DSCR loan on a pure rental may be the cleaner fit.
What Is a Bank Statement Cash-Out Refinance?
A bank statement cash-out refinance replaces your current mortgage with a larger one and hands you the difference in cash. The lender reviews your file on documented income under the applicable program, subject to lender guidelines. It does not read your tax returns for that income. It reads your deposits.
Most programs we place files with ask for 12 months of statements, either business or personal. The lender averages the eligible deposits and applies an expense factor. That result becomes your qualifying income.
Loan sizes generally run from about $125,000 to $3,500,000. Reserves commonly sit around 6 months of the housing payment. Lendmire is a mortgage broker, not a lender. It works with a network of wholesale lenders and matches your file to the program that fits.
The title asks for top providers, and a ranked list of company names would mislead you. Each lender sets its own ownership floor, expense factor, and leverage. The lenders that write a 25% owner’s file depend on your situation, so the useful question is which program features fit your file.
How Underwriting Treats a 25% Stake, Step by Step
Underwriting a minority owner follows a fixed sequence, and the ownership percentage enters late in it. Knowing the order shows you why a 25% stake produces less qualifying income than most borrowers expect.
1. Pick the account type. Business statements go through an expense factor and an ownership proration. Personal statements generally skip both, though the deposits must still trace back to business income.
2. Strip out non-income deposits. Transfers between your own accounts, loan proceeds, refunds, and gifts come out.
3. Average what remains across the statement window. The window is 12 months in the programs we see most.
4. Apply the expense factor. This is the share of deposits the lender treats as operating cost. The program sets it, not you. Some programs allow an accountant-prepared ratio instead of the default, and Scotsman Guide describes lenders accepting a profit-and-loss statement or expense statement from a third-party tax professional. Without that support, the file falls back to the program default.
5. Prorate by ownership. Qualifying income equals average monthly eligible deposits, times one minus the expense factor, times your ownership percentage.
6. Document ownership. Typical items are an operating agreement or K-1, a business license, and an accountant letter confirming your percentage and years in the business. Each lender’s checklist differs.
7. Run your debts against that income. Bank statement loans test your debt-to-income ratio. Credit, reserves, the appraisal, and the cash-out LTV cap follow.
A Worked Example in Indexed Units
These are indexed units, not dollars. They show the shape of the math, not any lender’s actual factor.
- Eligible deposits. A business averages 100 units a month.
- Expense factor. Assume an illustrative 50%, which leaves 50 units.
- A 100% owner. That owner is credited 50 units.
- You, at 25%. You are credited 12.5 units.
Twenty-five percent ownership does not mean 25% of the deposits count. It means 25% of what is left after expenses. Because of that proration, the business-statement route can come up thin for a large new mortgage, even when the file technically meets the ownership floor.
Business Statements or Personal Statements?
The choice between them usually decides whether your 25% stake matters at all. If the business pays you through salary, draws, or distributions into a personal account, a personal-statement program may count those deposits. The lender sees money that reached you, not a share of the company’s total.
Programs differ on how they treat owner draws and distributions. Some count them in full. Others still ask for ownership proof and apply their own expense factor. Confirm the treatment before you rely on it.
Business statements make sense when the company’s cash flow is strong and your share is meaningful. They make little sense when partners control the accounts and you receive only occasional payouts. In that case the personal route, or a different documentation path, usually tells a truer story.
One more point matters for a minority owner. A recent change in your ownership percentage, or a recent acquisition of your stake, can affect how many months of history the lender will count. Bring the dates.
Key Terms Defined
Expense factor: the share of business deposits a lender treats as operating cost before counting any income.
Proration: crediting you only the portion of business income that matches your ownership percentage.
LTV (loan-to-value): the loan amount divided by the property’s appraised value, shown as a percentage.
DTI (debt-to-income): your monthly debts divided by your qualifying monthly income.
Non-QM: a mortgage outside the Qualified Mortgage box, which still requires documented income and a repayment case.
DSCR (debt service coverage ratio): a rental property’s income divided by its full monthly obligation, used to qualify investment loans on the property instead of on you.
Asset depletion: a way to qualify from liquid assets, spread over time, instead of from monthly deposits.
How Much Cash Can You Pull Out?
The cash-out ceiling depends on how the property is used, and it sits below the purchase ceiling. Keep the two straight, because purchase figures do not apply here.
- Primary residence, cash-out: up to 80% LTV with a fixed expense ratio, and up to 75% with an accountant-prepared ratio. The accountant-prepared route is the lower ceiling.
- Second home, cash-out: up to 75% LTV, depending on loan size and credit.
- Investment property, cash-out: tops out around 75% LTV. Bank-statement availability on investment property varies by lender.
- Primary residence, purchase or rate-and-term: up to 90% LTV with select lenders, with the strongest files earning the top of the range.
- Asset-depletion alternative on a primary residence: up to about 80% LTV.
All of these are typical ranges from select wholesale lenders, subject to lender guidelines, credit, and property review. Existing liens, reserves, and the appraised value all shrink the proceeds. None of it is a commitment to lend.
Occupancy also decides which disclosure rules apply. An owner-occupied file, meaning a primary residence or second home, is a consumer mortgage, and TRID disclosures apply. A bank statement loan on a non-owner-occupied rental, including a short-term rental, is business-purpose and exempt from TRID. CFPB commentary adds that on owner-occupied rental property, acquisition credit is deemed business-purpose only above 2 units, and improvement credit only above 4 units. If you plan to live in the property, treat the file as consumer-purpose.
Owner-occupied bank statement files are available in the 16 states where Lendmire’s consumer mortgage operations run.
Where the General Rule Breaks
The 25% line is a guideline, and the edges are where files stall. Here are the cases to know.
- Under the floor. Business statements generally cannot be used. Your options become personal statements, if business income is genuinely paid to you, an asset-based path, or a DSCR loan on a rental.
- Exactly at the floor. The file technically qualifies, but only a quarter of the computed income counts. A small stake may not carry the debt.
- Partners hold the deposits. If other owners control the accounts, the statements may not show income that reaches you. Personal statements usually tell the better story.
- Pass-through deposits. Contractors, agents, and anyone who moves client money may see those deposits excluded or hit with a higher effective expense ratio.
- Thin or declining deposits. Lenders average the window, so one strong quarter will not hide a weak year.
- Ownership changes. A recently acquired stake, or a recent change in percentage, can reset how much history counts.
- Mixed-use accounts. Deposits that blend personal and business money are harder to trace. Clean separation helps.
For a short-term rental owned through a partial-ownership entity, Lendmire’s piece Short-Term Rental Cash-Out Refinance Rules When You Own Only 25% of the Entity covers the rental-specific angle.
Which Path Fits a Thin Income Share?
A bank statement loan tests you, while a DSCR loan tests the property. That difference decides most 25% owner files. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, and personal DTI generally does not stack across rentals. On a bank statement file, each added mortgage counts against your personal DTI.
| Path | What gets tested | Fit at 25% ownership |
|---|---|---|
| Business statements | Prorated business deposits | Thin unless the company is large |
| Personal statements | Deposits reaching you | Works if business pays you directly |
| Asset depletion | Liquid assets | Works for asset-rich owners |
| DSCR loan | Property rent vs. payment | Strong for a pure rental |
Many investors split the work. They use a bank statement loan on a primary residence and DSCR loans on the rentals. Select lenders in the network also offer DSCR programs below 1.00 coverage, but LTV and terms adjust. DSCR terms such as 40-year amortization and interest-only structures belong to the DSCR side. Alt-doc terms follow each lender’s program sheet, so do not assume a 40-year bank statement loan. For the rental side, Lendmire’s complete DSCR loans guide covers the full program.
How to Choose a Lender Without a Ranked List
A broker’s value is shopping several wholesale lenders against one scenario. Their ownership floors, expense factors, and overlays differ, so matching matters more than any leaderboard. Here is what to prepare and ask.
Before you apply, gather:
- 12 months of statements for the account type you plan to use
- Your operating agreement or K-1, the business license, and an accountant letter on ownership and years in business
- A list of every debt, with balances
- Your payoff statement and an idea of how much cash you want out
Questions to ask any lender or broker:
- What is the minimum ownership for business statements, and for personal statements?
- What expense factor applies, and can an accountant-prepared ratio lower it?
- How are owner draws and distributions treated?
- What is the cash-out LTV ceiling for this occupancy and loan size?
- How many months of reserves will you need?
Common Misconceptions
A bank statement loan is not a self-declared income loan. Income is calculated from documented deposits. The CFPB compliance guide notes that bank statements are an accepted way to verify income and that self-employment is a factor in the review.
Non-QM does not mean unverified. Neither does a 50% expense factor become a rule; it is a common default that varies by program. And a CPA letter is not always required, since some programs use it only to confirm ownership or lower the expense ratio.
See How the Numbers Work
If you are self-employed, Lendmire can help you compare bank statement loan options based on your deposits, the property, your credit profile, your leverage, and your goals. Call 828-256-2183 or request a quote at the Lendmire quote page.
This article is general information, not legal or tax advice. Consult a qualified professional, such as an attorney or CPA, about your own situation.
Frequently Asked Questions
Can I do a bank statement cash-out refinance with only 25% ownership?
Often yes, but the income counted is your prorated share after the expense factor. Many programs set 25% as the business-statement floor, though each lender’s sheet governs. Below it, personal statements, asset depletion, or DSCR are the usual fallbacks.
Do personal or business statements work better for a minority owner?
It depends on how you are paid. If the business moves money into your personal account, personal statements may reflect your real income. If your share is small and partners control the cash, business statements prorate you down to a thin number.
How much equity do I need for a cash-out?
Cash-out leverage tops out at 80% LTV on a primary residence, 75% on a second home, and about 75% on an investment property. Existing liens and reserves reduce the proceeds. Programs vary, so expect lender-specific caps. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Will my partners need to sign anything?
Ownership documents are required, and a lender may ask about signing authority if the property sits in an entity. Requirements vary by lender and by how title is held, so raise this early.
When is DSCR a better fit than a bank statement loan?
On a pure rental, when your prorated income would be thin or your DTI is crowded with other mortgages. DSCR is reviewed on the property’s rent against its payment, subject to lender guidelines, so your ownership share in another business matters less.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages for self-employed and high-net-worth borrowers are arranged through wholesale lenders on primary residences, second homes and investment properties; every file is underwritten by the lender under its program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide, Rev Up the Engine for Non-QM Lending
3. CFPB ATR/QM Small Entity Compliance Guide
This article is part of Lendmire’s bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.