The Quick Read: The two loans answer different questions about a Pennsylvania business owner. A bank statement loan asks whether your business or personal deposits show steady cash flow. An asset-based mortgage asks whether your balance sheet can carry the loan, either outright or as converted monthly income.
- Bank statement loans fit owners with strong deposits, thin traditional personal-income documentation, and modest liquid savings.
- Asset-based loans fit owners with large liquid balances and little documented income, such as a founder after a sale.
- The asset qualifier path covers the whole loan with eligible assets and documents no income.
- The asset depletion path divides usable assets by 60 months into qualifying income, which then runs through the debt-to-income test.
- All figures are subject to underwriting, and a borrower is qualified on one path at a time.
Which one fits depends on where your financial strength lives. If it lives in the checking account of a busy, profitable company, deposits tell the story. If it lives in brokerage, savings, and retirement balances, assets tell it better.
Lendmire is a mortgage broker. It places both kinds of loans through select lenders in its wholesale network. Consumer mortgage lending is available in 16 states, and Pennsylvania is one of them. The program figures below do not change by state. This is a comparison, not a pitch.
First, a Word on the Label
“Asset-based mortgage” means different things depending on who is talking. Here it means a consumer mortgage qualified on your assets, through the qualifier or depletion path. It does not mean business lending secured by receivables or inventory. It also does not mean a pledged-asset loan, where you post securities as collateral.
A third product often gets pulled into this conversation: the DSCR loan. It qualifies the rental property on its own rent and sits outside this comparison, except where noted. Our complete DSCR loans guide covers that route.
Side-by-Side
This table describes Lendmire’s asset-based parameters. The bank statement column shows published industry norms, which vary by lender.
| Factor | Asset-Based Mortgage | Bank Statement Loan |
|---|---|---|
| Review basis | Eligible assets, alone or as income | Averaged deposits as income |
| Income documented | None (qualifier) or derived (depletion) | Derived from 12 or 24 months of statements |
| Key documents | Asset statements, with seasoning | Statements, ownership proof, often a CPA letter |
| Occupancy | Primary, second home; investment on depletion path | Primary, second home, investment (industry norms) |
| Business ownership role | Business funds beyond your share not eligible | Ownership floor often around 25% (industry norm) |
| Reserves | None at or below 75% LTV (qualifier) | Lender-set, varies by program |
| Debt-to-income | Not tested (qualifier); tested (depletion) | Typically tested on owner-occupied loans |
| Timeline | Depends on file and asset seasoning | Depends on file and statement review |
Both are non-QM consumer loans on a residence. Neither is a “no-documentation” product. The assets, or the deposits, are documented in full.
How the Bank Statement Loan Works
Bank statement lending turns deposits into income. The lender takes 12 or 24 consecutive months of statements, totals the eligible deposits, and applies an expense factor if the account is a business account. The result, divided by the months in the period, becomes qualifying income. A CPA or tax preparer letter can sometimes support a different expense ratio than the default.
Three practical points matter for owners:
- Ownership share. Business statements generally require that you own a meaningful stake, and a floor around 25% is common in the industry. Lendmire’s piece How to Count Your Ownership Share on a Bank Statement Loan walks through the documentation.
- Commingled accounts. A personal account that receives business receipts is usually treated as a business account, so the expense factor applies.
- Everything else still gets reviewed. Credit, reserves, the property, and debt-to-income on owner-occupied loans all stay in play.
The bank statement route is built for the owner whose traditional personal-income documentation shows heavy write-offs while the company account shows real cash flow. It fails the owner whose deposits are lumpy or inconsistent, or who owns too small a share of the business.
How the Asset-Based Mortgage Works
This program has two paths. Name the path whenever a number appears, because the rules differ.
Asset qualifier path. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. Brokerage accounts, certificates of deposit, money market, and savings count at 100%. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Here is the shape of it. Take an $800,000 loan. Say the borrower holds $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) under 59½ (90%, so $270,000), and $200,000 in savings (100%, so $200,000). That counts $800,000 of usable assets and is reviewed on assets alone. The lender’s own calculation governs.
Leverage on this path runs up to 80% loan-to-value on a purchase and 75% on a refinance of a principal residence or second home. Loans go up to $4,000,000. The minimum credit score is 600. Seasoning is 60 days, with two months of statements for each qualifying account. No reserves are required at or below 75% loan-to-value.
Asset depletion path. Eligible assets are discounted, added up, and divided by 60 months to create monthly qualifying income. That income must carry the housing payment and other debts through the debt-to-income test. Cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
Here is the shape of that one. Say a borrower holds $1,500,000 in securities (80%, so $1,200,000) and $300,000 in cash (100%). That is $1,500,000 usable, divided by 60 months, or $25,000 of monthly qualifying income. The debt-to-income test then applies.
On the depletion path:
- Principal residence and second home reach 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
- Investment property reaches 65% on a purchase or rate-and-term refinance, and 60% on a cash-out.
- Loans run from $125,000 to $3,500,000, and a first-time investor needs a 700 score.
- Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They must never fall below $250,000 liquid when depletion is the only income source.
- Statements must be at least 120 days old at application, plus one within 45 days. Credit follows the lender’s matrix.
- Cash-out proceeds never count as qualifying assets.
Some asset types are not published as eligible on either path. These include cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share. The documented route is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source.
When the Bank Statement Loan Is the Better Fit
The bank statement loan wins when your income is real but your balance sheet is modest. Consider these profiles.
The reinvesting owner. A Pennsylvania contractor, restaurant owner, or professional-practice partner plows profits back into the business. Traditional personal-income documentation shows little after write-offs, and personal savings are thin. Deposits are strong and steady. Assets cannot carry a large loan, but deposits can support one. This is the textbook bank statement borrower.
The owner who wants a smaller footprint of capital. Qualifying on deposits means you do not have to park a large pile of liquid assets to satisfy the lender. If your capital works hard inside the business, tying up a seven-figure balance for an asset test may be a bad trade.
The owner with a second-home or investment goal and steady cash flow. Industry norms allow bank statement programs across primary, second, and investment property, which gives you more property-type flexibility than the qualifier path.
The flip point: if your deposits swing wildly month to month, if you own a small share of the business, or if much of your cash moves through accounts you cannot cleanly document, the deposit method gets difficult. A CPA letter helps, but it cannot fix inconsistent history. Lendmire’s explainer How to Use a Personal vs Business Account for a Bank Statement Mortgage covers that choice.
When the Asset-Based Mortgage Is the Better Fit
The asset-based mortgage wins when your balances are large and your documented income is not.
The owner after a sale. Someone who sold a Pennsylvania business has a large cash position and no current earnings. Deposits show a one-time event, not a pattern. Assets show the real picture. Sale-of-business, inheritance, and legal-settlement funds are excused from the depletion path’s seasoning rule, though the lender still reviews them.
The owner between ventures. A founder who stepped back and lives on a portfolio can qualify on assets without proving a paycheck. On the qualifier path, no employment or income is documented at all.
The asset-rich, income-light household. Retirees and early-retired professionals fit here too. Deposits are modest, balances are large.
The buyer who wants to avoid the debt-to-income test. The qualifier path does not test it, because no income is documented. The lender’s ability-to-repay review rests on the assets. The depletion path, by contrast, does run derived income through the test. That is the tradeoff between the two paths.
The flip point: if most of your wealth sits in the business, or in assets the program does not accept, the asset route runs out of road. Business funds beyond your ownership share are not eligible. Illiquid holdings do not count until they become seasoned cash.
Three Pennsylvania Owner Profiles
These are illustrative, not offers. Each describes a pattern, not a specific borrower.
| Owner profile | Likely lead path | Why |
|---|---|---|
| Profitable owner, heavy write-offs, modest savings | Bank statement | Deposits show cash flow assets cannot |
| Founder who sold the company, no current pay | Asset-based | Balance sheet is the strength |
| Owner with both strong deposits and large balances | Run both | The stronger result may favor either |
For the third owner, compare outcomes. Which method yields the stronger file for the loan size, property, and leverage you want? Sometimes deposits produce more qualifying income. Sometimes assets cover the loan outright and skip the debt-to-income test altogether. A broker that places both can run each and show you the difference. The depletion path also allows asset-derived income to supplement documented income, up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived.
Where Each Option Runs Into Trouble
- Bank statements: inconsistent deposits, commingled funds, an ownership share below the program floor, or a business account that is really a pass-through for someone else’s money.
- Asset-based: assets held in the business instead of personally, thin seasoning, ineligible asset types, or retirement balances discounted more than you expected.
- Both: a credit profile below the lender’s matrix. The qualifier path floor is 600, and the depletion path follows the lender’s matrix. Housing history of 0x30x12 is the standard, and one 30-day late in the last twelve months is considered case by case.
Pennsylvania adds no special program rule that changes any of this. State facts like taxes and insurance are cost context, not program parameters.
A Short Note on the Rules Behind These Loans
Both products are non-QM consumer loans on a residence, so lenders still must make a reasonable repayment determination. The CFPB’s ability-to-repay compliance guide says the rule does not require any particular underwriting model. That is why deposit-based, asset-based, and other methods can all exist. Alternative documentation is not the same as no documentation.
One related point for owners who also hold rentals. Rental financing on non-owner-occupied property is generally treated as business-purpose lending, which is why DSCR loans work differently. The CFPB’s Regulation Z exemption addresses that treatment. Tax treatment varies; consult a qualified professional.
Which Should You Start With?
Use this sequence:
1. Tally your eligible liquid assets with the credit percentages. If they equal or exceed the loan amount, the qualifier path is worth a look. 2. Gather 12 or 24 months of statements and estimate deposit-based income. Do the numbers support the payment? 3. Check ownership share, account structure, and any commingling. 4. Compare. If both work, pick the one that keeps your capital and leverage where you want it. 5. If neither fits, consider other routes, such as DSCR for a rental purchase or a conventional full-documentation loan.
Frequently Asked Questions
Is a bank statement loan the same as an asset-based mortgage?
No. A bank statement loan converts deposits into qualifying income. An asset-based mortgage uses eligible balances, either covering the loan outright or converting to income through a 60-month divisor. Both are non-QM, and both document what they rely on.
Do I have to sell my assets to qualify?
No. On both asset paths the balances are counted, not liquidated. Funds needed for down payment or closing costs are generally set aside first, so they cannot also count as qualifying assets. Subject to underwriting.
Can a business owner use both methods?
You can compare both on the same borrower, but a borrower is qualified on one path at a time. Running both shows which method gives the stronger file. Some programs also let asset-derived income supplement documented income.
Can business funds count as assets?
Generally only to the extent of your ownership share, and the program does not publish business accounts as eligible beyond that. Moving money into a personal regulated account means it must season before it counts.
Which is better for a Pennsylvania owner who sold a company?
Usually the asset-based path, because deposits reflect a one-time event instead of a pattern. If you also have strong ongoing deposits from a new venture, run both.
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. For a deposit-based owner, the same comparison runs the other direction, and the better fit usually shows up once both are laid side by side.
Lendmire’s asset-based mortgage in Pennsylvania page presents the program for Pennsylvania borrowers.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB – ATR/QM small entity compliance guide
2. CFPB – Regulation Z §1026.3, exempt transactions
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 Depletion vs Bank Statement Loan for a High-Net-Worth Buyer · How to Document a Bank Statement, 1099 or Asset Depletion Loan · Asset Depletion vs Bank Statement HELOC for an Owner Between Businesses
Guides: Asset-Based Mortgage in Pennsylvania
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.