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Starting a new business often requires significant upfront capital—but what if you could use the equity in your home without traditional income documentation? A bank-statement cash-out refinance may be the ideal financing solution for self-employed entrepreneurs looking to launch a new venture without the red tape of conventional lending.
In this article, we’ll explore how this refinance strategy works, its key benefits, qualification criteria, and steps to get started.
What Is a Bank-Statement Cash-Out Refinance?
A bank-statement cash-out refinance is a mortgage option designed for self-employed borrowers or business owners who do not have traditional W-2 income. Instead of verifying income through tax returns or pay stubs, lenders use 12 to 24 months of bank statements to evaluate income and determine loan eligibility.
This type of loan allows homeowners to tap into their home’s equity by refinancing their current mortgage and pulling out cash—which can then be used to fund a new business or expand an existing one.
Key Benefits for Aspiring Business Owners
Access Capital Without Traditional Income Proof
Traditional lenders may require tax documents and W-2s. With bank-statement loans, your business deposits are what matter most.
Flexible Use of Funds
Whether it’s equipment, inventory, or marketing, there are no restrictions on how the funds are used—perfect for launching a new venture.
Simplified Qualification for Self-Employed Borrowers
If your income is not easily documented, this loan product may provide a path forward that traditional loans can’t.
Ready to explore your eligibility? Contact our loan specialists today for a free consultation.
Who Qualifies for a Bank-Statement Refinance?
To qualify, borrowers typically need to meet the following requirements:
- Self-employed for at least 2 years
- Strong bank statement deposits over 12–24 months
- Credit score of 620+ (varies by lender)
- Sufficient home equity (usually 20%+)
- Debt-to-income ratio within acceptable range
Keep in mind that documentation of business expenses and a solid deposit history are essential.
Not sure if your financials qualify? Get pre-qualified today with no impact on your credit score.
How to Use Your Refinance to Fund a New Business
- Evaluate Your Equity – Use a home value estimator or speak with a mortgage advisor to determine how much equity you can access.
- Gather Bank Statements – Collect 12 to 24 months of personal and business bank statements.
- Apply With a Lender Who Offers Bank-Statement Loans – Not all lenders offer these. Choose a specialist experienced in self-employed mortgages.
- Use Funds Strategically – Allocate your cash-out funds to launch your business—such as equipment, startup inventory, or working capital.
Need help finding the right lender? Start your refinance journey here with our expert-guided process.
FAQ: Bank-Statement Cash-Out Refinance for Business
Can I use the cash-out amount for any purpose
Yes. Unlike SBA or business loans, there are no usage restrictions. Funds can be used for business startup costs, expansion, or even to pay down higher-interest debts.
Do I need to own a business already to qualify?
Not necessarily. Many lenders focus on your self-employment status and the income deposits shown in your bank statements.
How long does the refinance process take?
Typically, 3–6 weeks from application to funding—faster than many traditional business loans.
Will my personal credit score impact approval?
Yes, most lenders require a minimum credit score. However, guidelines are more flexible compared to conventional loans.
Read Next
- How Bank Statement Loans Work for Self-Employed Borrowers
- Top Alternatives to Traditional Business Loans for Entrepreneurs
- Cash-Out Refinance vs. HELOC: Which is Right for You?
Using a bank-statement cash-out refinance can be an innovative way to transform your home equity into startup capital—especially if you’re self-employed and face challenges with conventional financing.
If you’re dreaming of launching your own business, the right refinance solution could be your first step toward entrepreneurship.
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
