The Quick Read: Owning 25% of a business does not set the size of your cash-out check; the property’s loan-to-value (LTV) ceiling does, while your ownership share only scales the income you can use to qualify. The cash you receive is roughly the new loan minus the old loan payoff and closing costs. A 25% stake can shrink or sink the file if your share of income cannot support the loan.
- The LTV ceiling sets the maximum loan. Ownership share does not change it.
- Ownership share scales qualifying income, so it can limit the loan you qualify for.
- On a primary residence, cash-out runs up to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio, subject to lender guidelines.
- On a second home, cash-out runs up to 75% LTV. On an investment property, it tops out around 75% LTV.
- Money you take out in the refinance is loan money, so it never counts as income or deposits.
Which Limit Decides Your Check?
Two separate limits apply to every bank statement cash-out, and the lower one wins. The first is equity: the appraised value times the LTV ceiling, minus what you owe. The second is income: how large a loan your documented deposits can support once the lender runs debt-to-income (DTI), which divides your monthly debts by your qualifying income.
Ownership share enters only through the income limit. A 100% owner with the same deposits would count four times the share of business income that a 25% owner can, and expense factors and any minimum ownership threshold further shape the result.
Here is a simple picture in index units, not dollars. Say your property’s value is 100 and your existing payoff is 50. At a 75% cash-out ceiling, the new loan tops out at 75. That leaves about 25 before costs. Those numbers are identical whether you own 25% or 100% of the business. What changes is whether your income supports a loan of 75. For a 25% owner, it may not. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Key Terms Defined
Cash-out refinance: A new, larger loan that pays off the old one and hands you the difference in cash.
LTV (loan-to-value): The new loan divided by the appraised value of the property.
Expense factor: The share of business deposits a lender treats as operating costs, which is removed before income is counted.
Ownership share: The percentage of the business you own, which scales how much of its income counts as yours.
Eligible deposits: Business or personal deposits left after the lender removes transfers, loan proceeds, refunds and one-time items.
DTI (debt-to-income): Your total monthly debts, including the new payment, divided by qualifying income.
How the Lender Builds Your Income Number
Bank statement qualification starts with 12 months of business or personal statements. Qualifying income comes from deposit averages with lender-specific expense factors. The loan is reviewed on documented income under the applicable program, subject to lender guidelines. Scotsman Guide’s non-QM primer describes self-employed borrowers supplying 12 to 24 months of statements, with a standard expense factor applied. It also notes that a profit-and-loss statement or an expense statement from a third-party tax professional can be used instead.
The pattern across programs looks like this:
Eligible deposits ÷ months × (1 − expense factor) × ownership share = monthly qualifying income.
The exact factor varies by program, business type and documentation. Don’t assume a number. Don’t assume you can choose one, either. The program sets it, and a CPA letter or P&L may support a lower factor only where the program allows.
The order of cleanup matters:
1. Transfers between your own accounts come out first.
2. Loan proceeds, refunds and one-time items come out next.
3. The expense factor reduces what remains.
4. Your ownership share scales the result.
Then the lender runs DTI with the new payment included. Cash-out size, LTV and DTI all constrain one another, so a larger loan raises the payment and tightens the income test at the same time.
Side by Side: 25% vs 50% vs 100% Ownership
Run the same business deposits and the same property through three ownership levels. The property side never moves. The income side does.
| Ownership | Share of business income counted | Likely binding limit |
|---|---|---|
| 25% | One quarter | Income (DTI) |
| 50% | One half | Income or equity |
| 100% | All eligible income | Usually equity (LTV) |
The pattern is simple. The smaller your stake, the sooner income becomes the ceiling. A large equity position doesn’t guarantee a large check, because a lender won’t size the loan past what your documented income supports.
Many programs also set a minimum ownership stake before business deposits can be used at all. Programs across a wholesale network differ on this, so a 25% owner should confirm the threshold before building a plan around business statements.
Cash Released vs Cash Received
The gap between the maximum loan and your check can be wide. Here is what comes out of the top:
- The payoff of your existing loan, which is the biggest item.
- Closing costs and prepaids.
- Any required reserves, commonly around 6 months of the housing payment on these programs.
A free-and-clear property still counts as cash-out, because the entire new loan is money taken against equity. Lendmire’s page on cash-out on a free-and-clear home covers that case.
A lower appraisal shrinks the cash directly. The ceiling is a percentage of value, so a softer value means a smaller loan and a thinner check.
What Changes by Occupancy
Occupancy sets the cash-out ceiling. Three numbers matter, and each applies to its own property type:
| Occupancy | Typical cash-out ceiling |
|---|---|
| Primary residence | Up to 80% LTV (75% with accountant-prepared ratio) |
| Second home | Up to 75% LTV |
| Investment property | Around 75% LTV |
Those are cash-out figures. Leverage on a purchase or rate-and-term refinance runs higher on a primary residence, up to 90% LTV through select lenders, but that ceiling does not apply here. Loan sizes on these programs run roughly $125,000 to $3,500,000. Short-term rentals run tighter than standard long-term rentals on cash-out, around 70% LTV against about 75%. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Occupancy also decides the paperwork. An owner-occupied file is a consumer mortgage, so consumer disclosure rules apply. A bank statement loan on a non-owner-occupied rental, including a short-term rental, is business-purpose and exempt from those disclosures. Know which one your property is before you apply. Consumer mortgage licensing for this lane covers 16 states, so availability depends on where the property sits.
Personal or Business Statements for a Partial Owner?
This is where a 25% owner can sometimes win. Personal statements typically count most deposits with little or no expense factor. Lenders usually still want some business statements to confirm the company is operating. If the business pays you regularly into a personal account, personal statements may show more usable income than your scaled share of business deposits.
Treatment varies by program, so describe your deposit pattern to a broker before choosing. Some programs also let co-borrowers’ ownership be combined. That is program-specific, not a general rule.
Declining deposits are a red flag in any bank statement file. Underwriters read the trend as well as the average.
Which Entity Is the 25%?
The question hides an ambiguity worth settling. If your 25% sits in an operating business whose deposits you use for income, ownership scaling applies as described above. If the 25% sits in the LLC that holds the rental, you are in a different conversation.
On a DSCR loan, the property’s rent carries the file, not your personal income. That structure suits a minority owner whose share of business income is thin. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Entity ownership thresholds on DSCR files differ by lender, and they depend on the borrower, the property and current guidelines. Ask before you assume.
A common sequence is a bank statement loan on the home and DSCR loans on the rentals. For the complete picture, see the complete DSCR loans guide.
What Shrinks the Check
Several avoidable items can shrink the check:
- Deposits that don’t count: transfers, loan proceeds, refunds, one-time items.
- A heavier expense factor than you expected.
- Cash-out proceeds from an earlier refinance counted as income. They can’t be. Seasoning between cash-outs is set lender by lender, as covered in Lendmire’s piece on cash-out twice in a row.
- Existing debts that crowd the DTI test.
- A lower appraisal.
Common Misconceptions
“My ownership percentage determines my cash-out.” It doesn’t. LTV caps the loan. Ownership scales only the income.
“Non-QM means no underwriting.” The lender must still verify what it relies on. Scotsman Guide notes non-QM lenders must still confirm ability to repay.
“The two-year self-employment rule is federal law.” The CFPB’s ability-to-repay guide says a lender may consider self-employment income and must make a reasonable, good-faith repayment determination. It prescribes no single formula and no minimum time in business. A two-year habit is a lender overlay.
Quick Self-Test: Estimate Your Own Number
1. Take the appraised value you expect and multiply by the ceiling for your occupancy type.
2. Subtract your current payoff. That is your equity-based maximum before costs.
3. Subtract closing costs, prepaids and reserves.
4. Now test income: eligible deposits, less the expense factor, times your ownership share.
5. Ask whether that income supports the new payment under DTI. If not, the income limit is your real ceiling.
Your result is the lower of the two answers. A broker who shops several wholesale lenders can match the file to the program whose documentation rules fit your deposit pattern.
This article is general information, not legal or tax advice. Consult a qualified attorney or CPA about your own situation. Tax treatment varies; consult a qualified professional.
If you are self-employed and want to see how the numbers work, Lendmire can help you compare bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Lendmire is a mortgage broker arranging financing through select lenders in its wholesale network, and every file is underwritten individually. Reach the team at 828-256-2183.
Frequently Asked Questions
Does owning only 25% reduce how much I can borrow?
Not through the LTV cap, which depends on the property and occupancy. It can reduce the loan you qualify for through income, because only your share of business income counts. A smaller counted income means a smaller supportable payment.
Can I use personal statements instead of business statements?
Often, yes, though lenders usually want some business statements to confirm the company operates. Treatment varies by program.
Do cash-out proceeds count as income on my next file?
No. Proceeds are loan money, so they can’t be counted as deposits or income. Seasoning between repeat cash-outs is set by each lender.
What if my 25% is in the LLC that owns the rental?
Then a DSCR loan may be the cleaner path. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, rather than on your share of business income.
How much equity can I pull from each property type?
Typically up to 80% LTV on a primary residence (75% with an accountant-prepared ratio), up to 75% on a second home, and around 75% on an investment property. Short-term rentals run tighter, around 70%, subject to lender guidelines.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. 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”
2. 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
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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.