The Quick Read: Selling a business leaves you with large balances and little documented income, and asset-based programs fit that gap: one path counts eligible assets against the whole loan, another turns them into monthly qualifying income, and cash-out leverage on the depletion path tops out at 60% on a cash-out refinance of a home or investment property, subject to underwriting.
- Two paths, one at a time. The asset qualifier path covers the loan with assets alone. The asset depletion path divides usable assets by 60 months to create income.
- Sale proceeds must be in your account. Escrow holdbacks, earn-outs and seller notes do not count until they are paid out.
- Privately held company stock is not an eligible asset on either path. Documented liquid assets are the route, including seasoned cash from the sale.
- Assets are documented, income is not. Your statements are fully reviewed. You skip traditional personal-income documentation, pay stubs and employment verification on the qualifier path.
What This Loan Actually Is
An asset-based mortgage is reviewed around what you own instead of what you earn. That suits a founder who just sold a company. The checking account is full, but the paycheck stopped.
Across the select lenders in Lendmire’s wholesale network, two paths exist. A borrower is qualified on one path at a time, and the two tables never blend.
- Asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Loans run up to $4,000,000.
- Asset depletion path. Usable assets are divided by 60 months to produce monthly qualifying income. That income must carry the full housing payment and your other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000.
There is one catch for cash-out. On the qualifier path, the lender decides whether cash-out proceeds are allowed and at what leverage. That figure is not published, so treat it as a question for underwriting. The depletion path publishes cash-out leverage, which is why most cash-out files after a business sale are built there. You can read more in Lendmire’s overview of asset-based mortgage programs.
How Underwriting Treats the Sale, Step by Step
Underwriting reads a business sale as a source of assets, not a source of income. Here is the order a file moves through.
1. Pick the path. If your assets cover the whole loan, the qualifier path is simpler. If they do not, or you want to supplement other income, the depletion path applies.
2. Pick the property type. A principal residence or second home is a consumer purchase or refinance. An investment property is eligible only on the depletion path.
3. List the accounts. Brokerage, CDs, money market, savings and retirement accounts all go on the list. Each gets a percentage, covered below.
4. Document the sale. The usual file holds the closing or settlement statement from the sale and statements showing the funds landed. If the money moved through an entity, add the paper trail from the entity to you.
5. Check seasoning. Seasoning is how long money has sat in your accounts. The qualifier path wants 60 days and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old plus one within 45 days. Sale-of-business funds are excused from that depletion-path seasoning.
6. Check credit and leverage. Credit, loan-to-value (LTV) and minimum assets are tested next.
7. Underwrite and appraise. Every file is fully underwritten and the property is appraised. Subject to underwriting, the lender’s own calculation governs.
“No income documentation” never means “no documentation.” The assets are the whole case, so they are documented closely.
Which Assets Count, and at What Percentage
Not every dollar counts at face value. Each path applies its own credit percentages, shown here as the share of the balance that counts.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage / securities | 100% | 80% |
| Cash, savings, money market | 100% | 100% (cash accounts) |
| Certificates of deposit | 100% | 100% |
| Retirement (401(k), IRA) | 90% under 59½; 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
On the qualifier path, accounts combine. On the depletion path, custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units and funds from non-regulated financial companies are not eligible.
Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account, and the lender reviews the source.
Two Worked Examples
These shapes are illustrative. The lender’s own calculation governs.
Qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, $300,000 in a 401(k) and $200,000 in savings. You are under 59½.
- Brokerage counts at 100%, which is $330,000.
- The 401(k) counts at 90%, which is $270,000.
- Savings count at 100%, which is $200,000.
That is $800,000 of usable assets against an $800,000 loan. The file is reviewed on assets alone, subject to credit, property review and underwriting.
Depletion path. Say you hold $1,500,000 in securities and $300,000 in cash.
- Securities count at 80%, which is $1,200,000.
- Cash counts at 100%, which is $300,000.
Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts through the debt-to-income test.
Notice what the second example does. It does not spend your assets. It only measures them as if they were a salary.
Leverage, Credit and Minimums
Leverage depends on the path, the transaction and the occupancy. Treat these as ceilings, not offers.
- Qualifier path, refinance: up to 75% LTV on a refinance of a principal residence or second home. Cash-out terms are set by the lender and not published.
- Depletion path, principal residence or second home: up to 80% on a purchase or rate-and-term refinance, and up to 60% on a cash-out refinance.
- Depletion path, investment property: up to 65% on a purchase or rate-and-term refinance, and up to 60% on a cash-out refinance. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Cash-out proceeds never count as qualifying assets. You cannot pull cash out and then use that same cash to qualify.
Credit. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs a 700. Housing history is 0x30x12, and one 30-day late payment in the last twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path.
Minimum assets (depletion path). You need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is your only income source, you also need at least $250,000 in liquid assets. If asset income supplements documented income, it can do so up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Reserves. The qualifier path requires none at or below 75% LTV, and above that the lender sets them. The depletion path publishes no reserve months. All of this is subject to underwriting. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Where the General Rule Breaks
Sale proceeds look simple on paper. Here is where files stall.
Privately held company stock. Privately held company stock is not an eligible asset on either path. If you still hold shares in a closely held company, or you rolled equity into the buyer, that value is not part of your qualifying assets. Your route is documented liquid assets: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages above.
Money you have not received. Escrow holdbacks, earn-outs and seller notes are not assets until they are paid to you. An earn-out is a deferred payment that depends on how the business performs afterward. Treat it as future money. On the depletion path, escrow accounts are explicitly not eligible.
Money still in an entity. Funds in the selling LLC or a holding company need a clear paper trail to you. Business accounts count only for your ownership share, and the lender reviews how the funds reached your name.
Your own tax bill. Subtract what you owe before counting a balance. Tax treatment varies, so start with the IRS overview of capital gains and losses and consult a qualified professional.
Regulation Z exempts credit extended primarily for a business purpose from its consumer-credit rules. That matters for investment-property files, which carry a business-purpose certification and a use-of-funds statement. If part of the cash will go to personal spending, say so up front. The file is judged on the loan’s primary purpose, and records matter.
Loan size. The depletion path starts at $125,000. A small cash-out on a large property can fall below it.
Which Route Fits You?
Match the route to your situation. This table compares programs as each one works.
| Your situation | Likely fit |
|---|---|
| Assets cover the whole loan | Qualifier path |
| Assets are large; loan is larger | Depletion path |
| Property is a rental with strong rent | DSCR cash-out loan |
| You document income with deposits | Bank statement loan |
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. It is for business-purpose rentals, so it suits a different borrower. Lendmire’s piece Can You Take a Cash-Out Refinance on a Rental After Selling a Business? covers that route.
The trade-off is plain. Asset-based qualification keeps your income paperwork light, but it asks for large, well-documented balances. Cash-out leverage is lower than purchase leverage, and your liquid assets sit beside new debt. Think about whether the cash you pull out is worth that.
Key Terms Defined
Asset qualifier path: the program route where your eligible assets, after credit percentages, must cover the entire loan amount.
Asset depletion path: the route that divides usable assets by 60 months to create monthly qualifying income.
Seasoning: the length of time funds have been documented in your accounts before you apply.
Loan-to-value (LTV): the loan amount divided by the property’s appraised value.
Earn-out: a deferred payment from a business sale that depends on future performance.
Debt-to-income (DTI): your monthly debts, including the new housing payment, compared with your monthly qualifying income.
Frequently Asked Questions
Can I use the proceeds from my business sale right away?
Not until they are in your own account and documented. On the depletion path, sale-of-business funds are excused from the 120-day statement age. The qualifier path still wants 60 days of seasoning and two months of statements. Either way, the closing statement and statements showing the funds landed belong in the file.
Does my retirement account count?
Yes, at a discount. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. Subject to underwriting, the lender’s calculation governs.
What is the maximum cash-out on an investment property?
On the depletion path, up to 60% LTV on a cash-out refinance of an investment property. The qualifier path does not cover investment property. Appraised value, credit and minimum assets all still apply. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Can I qualify if I plan to start another business?
Yes, the file is reviewed on assets under the path you choose. If you also document income, the depletion path lets asset income supplement it up to a 45% debt-to-income ratio. Each file is underwritten individually.
Do I have to show tax returns?
Not on the qualifier path, which also skips pay stubs and employment verification. Assets are still documented with statements, and every file is fully underwritten.
Next Steps
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a broker that arranges these loans through select lenders. Consumer mortgage lending is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Programs change. This is not a commitment to lend.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Topic 409, Capital Gains and Losses — Internal Revenue Service
2. Regulation Z, business-purpose credit exemption — Consumer Financial Protection Bureau
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset-Based Cash-Out Refinance Requirements With a 529 Plan Counted as Liquid Assets · Asset-Based Cash-Out Refinance Lenders With Low Documentation Requirements · Asset-Based Cash-Out Refinance Requirements on a Non-Warrantable Condo
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.