The Quick Read: Often yes, but a lender treats company cash as business money rather than personal cash, so you need to prove you own the account, document how the money moves to you, and show the withdrawal will not leave the company short of working capital. Hard money lenders are usually looser on sourcing than permanent lenders. Looser is not the same as blind.
- Ownership and access come first. Only the share of the account you own may count.
- Move the money as a documented draw, distribution, salary, or formal loan, never as an informal swipe.
- Hard money often precedes a long-term refinance, and that later lender may ask where the original cash came from.
- Down payment, closing costs, and reserves are separate tests. One pool of cash rarely covers all three.
- Borrowed money must be disclosed as borrowed.
Three Different Questions Hiding in One
Most owners ask one question. There are really three: is it legal, will the lender accept it, and is it wise? A yes to one says nothing about the other two.
What this loan actually costs to carry.
Hard money is sized against the project and priced by time. Enter the deal and see how much the program will lend, the cash required at closing, the carry while you hold it, and what is left at the exit.
Leverage tiers on the current program: 85% with fewer than 2, 90% with 2 or more, 93% with 5 or more completed projects — every tier capped at 75% of after-repair value. Loan amounts up to $5,000,000, larger by exception; terms of 6 to 18 months, interest-only, no prepayment penalty. The rehab portion funds in draws against completed work, not at closing.
Program parameters shown update from Lendmire’s centralized guideline source. Rate, points, and months are editable assumptions, not quoted terms.
Cost cap sets the loan · positive spread
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. Rate, points, and months are editable assumptions. Hard money is business-purpose financing for real estate investors, not a consumer mortgage. Leverage on the current program tops out at 93% of project cost for investors with a documented track record, capped at 75% of after-repair value, with rehab funding up to 100% of the documented budget released in draws; actual terms vary by lender, borrower experience, property, and exit. Lendmire is a mortgage broker, not a lender.
Legal is about your entity. The company and you are separate in the eyes of the law, and the way you take money out decides whether that separation holds.
Lender-acceptable is about proof. Does the paper trail show the cash is yours to use?
Wise is about the business. Can it lose that cash and still make payroll?
A deal that passes only the lender test can still hurt you. Keep that in mind through the rest of this piece.
How Hard Money Lenders View Business Cash
Hard money underwriting is asset-based. The lender studies the property, your plan, and your exit. Your personal income gets less attention than it would at a bank. Most hard money lenders want you to have real money in the deal, and many are flexible on where it came from.
Flexible varies by lender, though. Some never ask for bank statements. Others trace every deposit. Across the network of lenders Lendmire works with, the pattern is consistent: the more experienced you are and the higher the leverage you want, the more attention your funds get.
Here are the program figures to plan around. All of them vary by lender, property, and experience, and none is a commitment to lend:
- Fix-and-flip: leverage runs 85% of project cost with fewer than 2 completed projects, 90% of project cost at 2 or more, and 93% of project cost at 5 or more. Every tier is capped at 75% of after-repair value.
- Bridge purchase without rehab: up to 80% of the purchase price.
- Refinance: up to 65% of value on cash-out and rate-and-term.
- Rehab budget: up to 100% of the rehab budget can fund in draws against completed work. That figure applies to the rehab budget only, never the purchase.
- Credit and terms: a 620 minimum score, with added conditions below 660. Terms run 6 to 18 months, interest-only, with no prepayment penalty.
Whatever the loan doesn’t cover is your cash. Your closing costs and interest payments also come from your own pocket, so budget for them on top of the down payment.
How Entity Type Changes the Answer
Your structure decides how money can leave the business. The right route for you is a CPA conversation, but here is the map.
| Entity | Typical ways cash comes out | Paper trail to keep |
|---|---|---|
| Sole proprietor | Owner draw | Bank records, books |
| Partnership | Draw or distribution | Operating agreement, capital account |
| LLC | Draw, distribution, or loan | Operating agreement, transfer record |
| S corp | Salary, distribution, or loan | Payroll and distribution records |
| C corp | Salary, dividend, or formal loan | Board minutes, loan note |
A sole proprietor has the easiest path. The business and the person are one, so the draw is simple. A corporation is stricter because it is a separate taxpayer. Money leaves through channels that are recorded as what they are.
Multi-owner companies add a wrinkle. If you own part of the company, a lender may count only your share of the balance. A 40% owner does not get to count 100% of the account.
Why Commingling Is the Real Danger
Courts and creditors pay attention when owners mix personal and company money. Wolters Kluwer explains that commingling means mixing owner and company funds. Courts can hold owners personally liable when they treat company money as their own or leave the company undercapitalized.
Single-owner companies are the most exposed. Nolo notes that a one-owner LLC finds it easier to mix funds and skip documentation, which raises the risk.
The fix is plain. Ohio State University’s farm office describes documenting a draw from the LLC into a personal account before spending it as the way to keep the liability shield intact. Draw first, record it, then spend.
Here is the part owners often miss, and lenders notice: you are about to buy investment property, and the liability shield exists to protect exactly that kind of asset. Sloppy entity habits put the thing you are financing at risk. Veil-piercing tests vary by state, and this is not legal advice.
Four Ways to Move the Money
Pick the method before you make the offer, not at the closing table.
Owner draw or distribution. The simplest route for most pass-through entities. You take your share, and the books show it. The tradeoff is that it permanently reduces company equity.
Salary or bonus. Clean and well documented through payroll. It costs more in payroll taxes, and it only works if the company can justify the amount.
Owner loan to yourself. The company hands you the money under a written note. The company carries the note on its books as a receivable, an asset you owe back to it. It needs real terms and real repayment, or it looks like a disguised distribution.
Reimbursement. If the company already paid a legitimate expense tied to you, such as a deposit on a deal the company is buying into, it can be reimbursed. This only works when the expense was truly the company’s.
Tax treatment differs for each. Tax treatment varies; consult a qualified professional before choosing a route.
What the Lender Will Want to See
Expect some version of this list. Hard money lenders may ask for less. Long-term lenders usually ask for all of it.
1. Recent business bank statements showing the balance.
2. Proof you own the company: an operating agreement, articles, or a K-1 or similar ownership record.
3. Evidence that you can sign on the account.
4. The transfer record showing the money moved to you as a draw, distribution, salary, or loan.
5. Personal statements showing where it landed.
6. If an LLC is the buyer, entity documents and a clear explanation of which account funded what.
Large, unexplained deposits are the red flag. A deposit with no story looks like borrowed money, and borrowed money is a different conversation.
Timing and Seasoning
Seasoning means how long money sits in an account before the lender relies on it. Many permanent lenders like a couple of months of clean history. Hard money lenders may skip that step entirely.
So sequence the move early:
1. Decide the method with your CPA.
2. Move the money well before you make an offer.
3. Leave it alone. Let statements show it sitting.
4. Keep the transfer paperwork in one folder.
Last-minute transfers are the pattern that causes questions. That is true even if the hard money lender never cares, because the next lender might.
Can Your Business Afford It?
Underwriters ask whether the company can still operate after the withdrawal. You should ask first. Run through these questions honestly:
- Does the remaining cash cover payroll and vendor bills?
- Are quarterly tax payments coming due?
- Would one slow month force you to borrow?
- If the flip stalls, can the company absorb the hit?
If your business income also supports your personal finances, expect a deeper review. Draining working capital to fund the down payment is a risk to the business, and a lender reading your statements can see it. Many lenders in the network want a letter or analysis showing the withdrawal won’t harm operations. CPAs are often reluctant to write that kind of letter, so line up the conversation early.
Business Credit Is Not Business Cash
A business loan, credit line, or card is borrowed money. Treating it like your own savings is where people get in trouble.
A law-firm analysis from Munoz Ghezlan explains that unsecured loan proceeds generally cannot fund a real estate down payment at lenders with borrowed-funds clauses. Secured loans may work, and merchant cash advances and invoice financing are not eligible. It also warns that passing borrowed money off as savings or a gift is fraud.
The rule is simple. If it is borrowed, say so. Hard money lenders often have more room for borrowed funds than permanent lenders, but disclosure is not optional anywhere.
Three Worked Scenarios
The sole proprietor. A contractor keeps most of her cash in a business account but owns the business outright. She takes a documented draw, lets it season in her personal account, and shows both statements. This is the cleanest path.
The LLC buyer. An investor buys through his own LLC, and the cash sits in a different company he co-owns with a partner. Now there are two entities, a partial ownership share, and a title question. He needs an operating agreement, a transfer record, and a written explanation. It is doable, but it takes work.
The S-corp owner. A restaurant owner wants to use the company’s cash for a bridge purchase. He talks to his CPA first, chooses between a distribution and a loan, and checks that payroll and tax payments are still covered. The money moves, the books reflect it, and the business stays whole.
When the Hard Money Loan Is Only Step One
Many investors refinance out of hard money into long-term rental financing once the property is stabilized. Lendmire arranges that path through select lenders in its wholesale network across 41 markets, including Washington, D.C. A long-term lender looks hard at your funds. Its underwriting also tests whether the rent covers the full monthly obligation, and clearing that test is not the same as positive cash flow. Lendmire’s complete DSCR loans guide walks through what that refinance looks for. Lendmire is a mortgage broker, not a lender. It places investment-property loans with wholesale lenders and does not fund, underwrite, or approve loans itself.
A clean paper trail on the original down payment makes that later step easier. A sloppy one can create a sourcing question just when you want to refinance.
Common Mistakes
- Treating “my company” as “my cash.”
- Moving money informally and fixing the books later.
- Draining operating cash and leaving no reserves.
- Calling borrowed money savings.
- Assuming a CPA letter will always be available.
- Forgetting that moving money to a personal account first doesn’t hide where it came from.
Next Step
If you are buying, rehabbing, or refinancing an investment property on a short timeline and want to see how the numbers work, Lendmire can help you compare hard money options based on the project, the exit plan, leverage, and your goals. Reach the team at 828-256-2183 or request a quote.
Key Terms Defined
Business funds: money held in an account titled in a company’s name, even when the owner spends from it personally.
Owner draw: money a sole proprietor or partner takes out of the business, recorded as a withdrawal rather than an expense.
Distribution: a payout of company profit or capital to an owner, recorded in the books as such.
Commingling: mixing personal and company money so the line between them blurs.
Seasoning: the time funds sit in an account before a lender relies on them.
Loan-to-cost: a loan amount measured against the total project cost rather than the property’s value.
Frequently Asked Questions
Do I need a CPA letter?
Not every lender asks for one. Some want an accountant’s statement that the withdrawal won’t hurt the business, and some CPAs decline to write one. Ask your lender what it needs before you ask your CPA, and plan for a cash-flow summary as a backup.
Can my LLC pay the down payment directly?
Often it can, if the LLC is the borrower and the funds sit in the LLC’s own account. That keeps the paper trail short. If the LLC is the buyer but the cash comes from a different company, expect extra questions about the link between them, subject to program terms.
Does using company cash count as borrowed funds?
No, if it is truly your own money, documented as a draw, distribution, or salary. A formal owner loan from your company is a gray area, so disclose it plainly. Money from a business loan or credit line is borrowed and must be shown that way.
Will hard money lenders trace the source of my cash?
Some do and some don’t. Hard money underwriting centers on the property, the plan, and the exit, so sourcing is lighter than at a permanent lender. A later refinance lender may still trace it.
Can I use company cash for closing costs and reserves too?
Possibly, under the same documentation rules. These are separate tests, though. Closing costs, interest payments, and reserves all need cash, and a company can run short fast if you pull from one pool for all of them.
For hard money options on a rehab or bridge purchase, see Lendmire’s piece Can You Use Hard Money for a Condo Flip Down Payment?.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage that places investor loans, including hard money and DSCR financing, across 41 markets, including Washington, D.C. Hard money underwriting centers on the property, the plan, and the exit, while DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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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. Wolters Kluwer – Piercing the Corporate Veil
2. Nolo – Piercing the Corporate Veil
3. Ohio State University Farm Office – Beware Piercing the Corporate Veil
4. Munoz Ghezlan – Using Business Credit for Rental Down Payments
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Hard Money Lenders Count Rehab Funds Toward Your Minimum Down · Hard Money Down Payment vs HELOC Draw for an Investor Purchase · Hard Money Bridge Down Payment Requirements for Out-of-State Investors
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.