The Quick Read: After a business sale, the right asset-based cash-out refinance is the one that matches your property and your balances. The asset depletion path turns liquid assets into qualifying income for a cash-out on a home or investment property, while the asset qualifier path covers a whole loan with assets alone. Both run through select lenders in Lendmire’s network, subject to underwriting. Your documented balances carry the file, not tax returns, pay stubs or employment verification.
- Two paths, one at a time. The asset qualifier path uses eligible assets to cover the entire loan. The asset depletion path divides usable assets by 60 months to create monthly qualifying income.
- Cash-out leverage is set on the depletion path. Through select programs, it is up to 60% on a cash-out refinance of a principal residence, second home or investment property.
- Cash-out proceeds never count as qualifying assets. The loan has to qualify on what you already hold.
- Privately held company stock is not eligible on either path. Sale proceeds sitting in a regulated account are the documented route.
- The best program depends on your situation. Property type, occupancy, balances and credit decide it. A broker that shops multiple wholesale lenders matches the file to the program.
Why a Business Sale Breaks Normal Refinance Underwriting
A standard refinance asks what you earn. After you sell a company, that answer gets awkward. Your last returns show a business you no longer own. Your next returns may show a lump of sale proceeds and little else.
A lender reading that file sees large wealth and no recurring paycheck. Both are true. The problem is that conventional underwriting only knows how to read the paycheck.
Asset-based programs fix the mismatch. They look at what you hold in accounts and ask whether those balances can carry the loan. For a founder between ventures, a retiree or anyone living on a portfolio, that is the question that fits.
Lendmire is a mortgage broker, not a lender. It places these files with select lenders in its network, and each file is fully underwritten. The assets are documented with statements. What goes away is the income paperwork, not the underwriting.
Key Terms Defined
Asset qualifier path: A program path where eligible assets, after credit percentages, must equal or exceed the entire loan amount. No employment or income is documented.
Asset depletion path: A program path that converts usable assets into monthly qualifying income. That income then runs through the debt-to-income test.
Haircut: The share of an account’s balance a lender refuses to count. A 70% credit on retirement accounts means a 30% haircut.
Seasoning: How long funds have sat in your account before the lender will count them.
Debt-to-income (DTI): Your monthly debts, including the new housing payment, compared with your monthly qualifying income.
Cash-out refinance: A new loan that pays off the old one and leaves you with extra cash, so the balance goes up.
Sourced funds: Money whose origin you can show on paper, such as a sale wire that lands in a named account.
The Two Asset Paths Side by Side
These are not two names for one program. Each uses different math, different leverage and different asset credit. A borrower is qualified on one path at a time, and the figures below never blend.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How it qualifies | Assets cover the whole loan | Assets ÷ 60 months = income |
| Income documented | None | Derived, tested through DTI |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Leverage | 80% purchase, 75% refinance | 80% or 60% on a residence |
| Credit | 600 minimum score | The lender’s matrix |
| Property | Principal residence or second home | Also investment property |
Every figure is a ceiling or floor through select programs, subject to underwriting. None is an offer.
The two paths also treat cash-out differently. On the asset qualifier path, whether cash-out is allowed, and at what leverage, is set by the lender and is not published. Don’t plan around a number there.
The asset depletion path is where a cash-out is clearly defined. Leverage for a cash-out refinance is 60% on a principal residence, a second home or an investment property. On a purchase or rate-and-term refinance, the same path allows 80% on a residence or second home and 65% on an investment property.
How to Pick the Best Program for Your Situation
No single program wins for every seller. The best program for your situation comes down to five questions. What are you borrowing against? Who lives there? How large and how liquid are your balances? Do you want to document any income at all? How much cash do you actually need out?
| If this describes you | Path to look at | Why |
|---|---|---|
| Balances exceed the whole loan | Asset qualifier | No income test at all |
| Big balances, you need cash out | Asset depletion | Cash-out leverage is defined |
| Rental where rent covers the payment | DSCR | Property income carries the file |
| Income shows in business deposits | Bank statement | Deposits document income |
| Consulting income plus assets | Asset depletion | Assets can supplement income |
Start with the property. A rental you do not live in can sit in a different lane entirely, and the section on alternatives below covers it. A home you live in, or a second home, belongs on one of the two asset paths.
Then look at the size of your balances against the loan. If eligible assets are as large as the whole loan, the asset qualifier path is the cleanest fit. If they are smaller but still substantial, converting them to income may work. For a cash-out, the depletion path is worth a close look, because that is where cash-out leverage is published.
Asset-based mortgage programs are placed through a network, so one scenario can be matched against several lenders’ guidelines. Their overlays differ, and the match matters more than any headline number.
Cash-Out Specifics: What the Loan Can and Can’t Do
The rule that trips up sellers is simple: cash-out proceeds never count as qualifying assets. If you refinance and receive cash, that cash cannot be used to qualify the same loan. The file has to stand on the balances you hold before closing.
Your cash-out is also limited by leverage. On the depletion path, 60% on a cash-out refinance of a principal residence, second home or investment property is the ceiling, subject to underwriting. Take a home worth $1,000,000 as a round example. A 60% ceiling means the new loan, including whatever it pays off, cannot go past 60% of value. A heavily mortgaged home leaves little room for cash. A lightly mortgaged one leaves more.
For an investment property, this path treats the loan as business-purpose. That is a notable difference from the residence side. Business-purpose financing sits outside the way a loan on your own home is reviewed.
The credit rules follow the path. 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 700. Housing history is 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path. None of this promises approval.
There is also a reason these programs exist. The CFPB’s ability-to-repay small-entity compliance guide says a creditor may consider current or expected income or assets other than the value of the dwelling. It also says the rule sets no specific debt-to-income threshold. Assets are a recognized basis for repayment on a consumer loan, and the program sets its own tests.
Which Assets Count and Which Don’t
Here is what counts on each path. Don’t carry a percentage from one table to the other.
Asset qualifier path (share of the balance that counts):
- Brokerage accounts, certificates of deposit, money market and savings: 100%.
- 401(k) and IRA balances: 90% under age 59½, 100% at 59½ or older.
- Accounts combine.
Asset depletion path (share of the balance that counts):
- Cash accounts and certificates of deposit: 100%.
- Securities: 80%.
- Retirement accounts: 70% at any age.
- Real-estate equity: 60%.
Several things are not eligible on the depletion path. These are 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.
Privately held company stock is not eligible on either path. If you still own shares of a closely held company, they do not count at any percentage. The documented route is a sale or buyout converted into a seasoned cash balance.
Other asset classes follow the same logic. Cryptocurrency, precious metals, collectibles, business accounts beyond your ownership share, and pledged or borrowed funds are not published as eligible on either path. Convert them to cash in a regulated account and let the lender review the source.
Handling Sale Proceeds Without Breaking the File
Where the money lands matters as much as how much it is. This is the checklist Lendmire walks sellers through.
- Put the wire in a personal account in your name. Money still sitting in the company’s account is not yours for qualifying purposes, beyond your ownership share.
- Keep the paper trail. The purchase agreement, the closing statement and the wire confirmation show the source.
- Don’t shuffle money between accounts. Every transfer becomes a question the lender needs answered.
- Mind the timing of statements. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business funds are excused from that seasoning on the depletion path.
- Know which proceeds are cash yet. Earn-outs, deferred consideration and unvested payments are not in your account, so they cannot be counted yet. Escrow holdbacks are not eligible on the depletion path while they sit in escrow. They help once released into your own account.
On paper, a business sale is one transaction with many parts. In an asset sale, buyer and seller each report how the price is allocated among the business assets, using Form 8594. If part of the price is paid over time, the installment method applies to that part of the sale, as the IRS explains in Publication 537. The practical result is a return that carries a one-time gain and no ongoing business income. An asset-based file doesn’t ask that return to prove recurring pay. Your statements do the work.
A related question is whether to apply before or after the sale closes. Before closing, there is nothing in your accounts to count. After closing and after the funds land, the balances exist. If you will earn consulting or transition income afterward, the depletion path lets asset income supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Two Worked Examples
The lender’s own calculation governs in every case. These show the shape of the math.
Asset qualifier path. Say a seller needs an $800,000 loan and holds three accounts. Brokerage accounts hold $330,000, counted at 100%, so $330,000. A 401(k) under 59½ holds $300,000, counted at 90%, so $270,000. Savings hold $200,000, counted at 100%, so $200,000. That counts $800,000 of usable assets, and the file is reviewed on assets alone.
Asset depletion path. Say a seller holds $1,500,000 in securities, counted at 80%, so $1,200,000. Cash is $300,000, counted at 100%, so $300,000. Usable assets total $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income must then carry the housing payment and other debts through the debt-to-income test.
Now the failure variant. Suppose the same seller kept half the sale price in shares of the buyer’s private company, or in an earn-out not yet paid. Those holdings count for nothing, and the usable total drops. Rebuilding the file means waiting until those amounts turn into seasoned cash. That is a common reason a seller’s file has to be rebuilt.
The depletion path has a floor, too. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They must never be below $250,000 liquid when asset depletion is the only income source.
When an Asset-Based Cash-Out Is the Wrong Tool
Sometimes assets are the right way into the loan and a cash-out is the wrong move. Three alternatives come up most often.
A rental property. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. A DSCR file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. If your plan is to pull equity from a rental, rent against the new payment is the key test, not your balances. Lendmire’s piece Can You Take a Cash-Out Refinance on a Rental After Selling a Business? covers that route.
A bank statement program. This one is for borrowers who document income with deposits. If your new venture is already producing deposits, that may fit better than converting assets. Lendmire’s guide Asset Depletion vs Bank Statement Cash-Out After Selling a Business lays out the tradeoff.
Just using the cash. If you have large liquid balances, paying cash is a real option. Financing keeps those balances working and available. Paying cash removes them from reach. That choice is about your liquidity needs, not about which program is best.
Market context is brief here. HousingWire’s non-QM guide lists asset depletion, bank statement and DSCR as separate non-QM programs, each built for a different borrower, and reports a recent annual non-QM volume of about $239 billion.
Risks and Tradeoffs to Weigh
A cash-out turns equity into debt. The loan is still a loan, even when it is qualified on your balances. A property secures it, and a drop in your assets can matter for any later refinance. Think about what the cash is for. Funding a new venture carries different risk than diversifying.
Leverage is also lower on the depletion path than many sellers expect. At 60% on a cash-out refinance, a lot of equity stays in the property.
Documentation is the other tradeoff. You give up income paperwork, but you give statements, source records and often a longer paper trail on the sale. Assets also shrink if markets fall, and the asset depletion math follows them down.
Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
Lendmire is licensed for consumer mortgage lending in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. The asset-based program is available in those states only.
Frequently Asked Questions
Does stock in my own private company count as an asset?
No. Privately held company stock is not an eligible asset on either path. The documented route is a sale or buyout that turns the shares into cash. Once that cash is seasoned in a regulated account, it counts at its normal percentage.
Can the cash I pull out count toward qualifying?
No. Cash-out proceeds never count as qualifying assets on the depletion path. The file must qualify on the balances you hold before closing. If you want more usable assets, they have to exist already.
Do I have to wait after the sale before applying?
Seasoning rules decide that. The depletion path excuses sale-of-business funds from its statement-age seasoning, though the most recent statement must still fall within 45 days. Each lender’s overlays can add conditions.
Can company cash count if I’m a part owner?
Only your ownership share of business accounts counts, and business accounts beyond that share are not published as eligible. Move your share into a personal account in your name and season it. The lender reviews the source.
Can I combine asset income with consulting or transition income?
Yes, on the depletion path. Asset-derived income may supplement documented income up to a 45% debt-to-income ratio. You would document the consulting income under the applicable program, subject to lender guidelines.
Next Step
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. A sale tends to leave a clean set of balances, and the right path often depends on what sits in which account.
Investors weighing their equity options can start with 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. CFPB — ATR/QM Small Entity Compliance Guide
3. HousingWire — Non-QM loans guide
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Cash Comes Out of an Asset-Based Cash-Out Refinance After Selling a Business? · How to Qualify and Apply for an Asset-Based Cash-Out Refinance After Selling a Business · How Soon After Selling a Business Can You Qualify for a Mortgage on the Proceeds? · Can You Get Approved for an Asset-Based Cash-Out Refinance After Selling a Business? · Best Asset-Based Cash-Out Refinance Program to Fund a Down Payment Without Selling · Best Asset-Based Cash-Out Refinance Program Without Restarting 30 Years
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.