Loading
in Amador City, CA
Both bank statement and P&L statement loans solve the same problem: proving income when you don't have W-2s. The difference is how you document that income and which lenders you can access.
Most self-employed borrowers in Amador City qualify for one but not both. Your business structure and how you track finances determines which path opens up.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate income. Lenders take your average deposits, subtract a percentage for expenses, and use the remainder as qualifying income.
This works best for borrowers who run cash through their accounts regularly. You don't need a CPA or formal financial statements. Just clean bank records showing consistent deposits.
P&L statement loans require a CPA-prepared profit and loss statement covering 12 to 24 months. Your accountant certifies the income, and lenders use that certified figure to qualify you.
This path opens up more lender options than bank statements. Some non-QM lenders prefer P&L statements because they show a clearer picture of business profitability versus gross receipts.
The main split is CPA involvement. Bank statement loans don't require an accountant. P&L loans do. That makes bank statements faster and cheaper to document, but P&L statements often get better pricing.
Your business structure matters too. Sole proprietors and single-member LLCs usually work fine with bank statements. Multi-member LLCs and S-corps benefit more from P&L statements that separate business income clearly.
Choose bank statement loans if you don't have a CPA or don't want to pay for prepared financials. They work well for sole proprietors, independent contractors, and small business owners with straightforward deposit patterns.
Go with P&L statements if you already work with a CPA and have formal business financials. This route makes sense for established businesses with complex structures or multiple income streams that don't show clearly in bank deposits alone.
No. Lenders pick one income documentation method per loan. You apply using either bank statements or P&L statements, not both together.
Bank statement loans typically close faster because you don't need to wait for CPA-prepared financials. Gather your statements and apply.
Yes. Down payment requirements are similar for both, typically 10-20% depending on credit score and property type. The income documentation is what differs.
Irregular deposits hurt bank statement loans. In that case, a P&L statement showing consistent profitability works better for qualifying income.
Usually slightly higher, but the gap is small. Most non-QM lenders price both loans within 0.25-0.50% of each other depending on the full borrower profile.