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in Ione, CA
Self-employed borrowers in Ione face a choice between two non-QM income verification methods. Bank statement loans pull income directly from deposits while P&L loans use CPA-prepared financials.
Both options solve the same problem—qualifying without W-2s—but they work differently. Your choice depends on how you run your books and what documentation you already maintain.
Bank statement loans use 12 to 24 months of business or personal bank statements to calculate income. Lenders total your deposits and subtract business expenses at a standard percentage.
This works best if you run consistent deposits through one or two accounts. You don't need a CPA or formal books—just clean bank statements showing regular income flow.
Underwriters typically count 50% to 100% of deposits depending on your business type. Higher percentages apply to service businesses with lower overhead.
P&L statement loans require a CPA-prepared profit and loss statement covering 12 to 24 months. Your accountant calculates net income after all business expenses.
This option suits borrowers who already maintain formal books for their business. The P&L shows true profitability rather than raw deposits, which can work in your favor if you have high revenue but also high legitimate expenses.
Lenders use the net income figure from your P&L. If your business shows strong profit margins on paper, this often qualifies you for higher loan amounts than bank statements would.
The main split comes down to documentation. Bank statements require no accountant—just clean deposits. P&L loans need a CPA to prepare formal financials showing your net income.
Income calculation differs significantly. Bank statement lenders apply standard expense ratios to your deposits. P&L loans use your actual reported profit, which can be higher or lower depending on your real business costs.
Processing speed favors bank statements if you have statements ready. P&L loans add time for CPA preparation, though this matters less if you already maintain quarterly financials.
Choose bank statement loans if you don't maintain formal books or don't have a regular CPA relationship. This works for contractors, consultants, and service providers who run lean operations with few deductible expenses.
Pick P&L loans if you already file detailed financials and your net profit looks strong on paper. This benefits businesses with significant legitimate expenses that reduce your deposit totals but still show healthy profit margins.
In Ione's small business market, many self-employed buyers use bank statements for simplicity. But if you're buying a higher-priced property and need every dollar of qualifying income, a CPA-prepared P&L often shows better numbers.
Yes, but it restarts underwriting. You'll need time for CPA preparation and new income calculations.
Rates are similar between both programs. Your credit score and down payment matter more than documentation type.
Most lenders require a licensed CPA. Enrolled agents sometimes qualify but check with your lender first.
Bank statements may qualify you for more. Choose the documentation method that shows stronger income for your situation.
Both typically require 12 to 24 months. Longer history strengthens your application but isn't always required.