Why entity owners look poor on paper
An S-corp owner is usually advised to take a reasonable salary and pull the rest as distributions, which minimizes payroll tax. An LLC taxed as a partnership issues K-1s that show each member's share of profit after every deduction the business could justify. Both structures are designed to keep taxable income low, and both feed conventional underwriting exactly the numbers it is required to use. The salary is small by design. The K-1 is small by design. The distributions are irregular by nature. The result is a profitable company whose owner cannot get a home equity line at a bank.
What the deposit method sees instead
- Gross revenue arriving over a year — customer payments, platform payouts, invoices being settled — rather than what was left after the accountant was finished.
- Consistency and trend. Twelve consecutive months make seasonality and growth visible in context.
- Recency. The window ends the week you apply, so this year's numbers are what count.
Deposits are not credited dollar-for-dollar. An expense factor is applied to arrive at usable qualifying income, and that factor depends on which program the file fits — there is no single percentage that applies to every business. The way to get a real number is a short conversation and a soft credit pull that does not affect your score.
Business account or personal account?
Either can work; they are underwritten differently. A business operating account shows gross revenue and typically receives the expense factor. A personal account that receives owner transfers shows what the business already paid you and is treated more like income than revenue. If revenue lands in the business account and you sweep to personal monthly, the business account is almost always the stronger story. If you have multiple entities, lead with the one whose account shows the clearest, steadiest deposit history.
Ownership percentage and partners
If you own less than the whole entity, expect the file to reflect your share and to ask how revenue is split. Partners do not have to co-sign a line secured by your home, but the ownership structure is part of the picture. Have your operating agreement or share breakdown handy — it is the one document beyond the bank connection that comes up.
Common questions
Do I need to provide K-1s or corporate tax returns?
No. Neither the entity's return nor your personal return enters the file. Income is derived from 12 months of deposits through a read-only bank connection.
I pay myself a small W-2 salary from my S-corp. Does that limit me?
No. The salary is not the input. The business account's deposit history is, and the salary you chose to pay yourself does not cap it.
What if my business has two accounts?
Lead with the account that receives revenue most directly. If both are needed to show the full picture, say so at the start — it is a structuring question, not a barrier.
Does the line have to be in the LLC's name?
No. It is a home equity line on a property you own personally, in your name. The business entity is where the income comes from, not the borrower.