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in Colusa, CA
Self-employed borrowers in Colusa face a choice: prove income with bank statements or with a CPA-prepared P&L. Both are non-QM loans designed for people who can't show traditional W-2 income.
The right option depends on how you run your business and what documentation you already have. Farmers, contractors, and small business owners in Colusa County use both paths successfully.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate your qualifying income. Lenders typically use 50% of total deposits as income, though some programs adjust based on your industry.
You don't need a CPA or formal financial statements. If you run cash through your accounts regularly and keep balances healthy, this route works well for borrowers who write off heavy expenses on taxes.
Most programs require 10-20% down and accept credit scores starting at 620. Rates run higher than conventional loans because of the non-QM structure.
Profit and loss statement loans require a CPA-prepared P&L covering 12-24 months of business activity. The lender uses your net profit as qualifying income, so heavy write-offs hurt you here.
This option appeals to borrowers who already work with a CPA and maintain clean books. If your business shows strong profitability on paper, you may qualify for higher loan amounts than bank statement programs offer.
Down payment and credit requirements mirror bank statement loans: 10-20% down and 620+ credit. The main difference is documentation, not eligibility.
Bank statement loans look at cash flow. P&L loans look at profitability. If you write off everything to minimize taxes, bank statements show more income because they count deposits before expenses.
P&L loans need a licensed CPA to prepare your financials. Bank statement loans just need your actual bank statements from any business or personal account where income flows through.
Both programs work for Colusa borrowers in agriculture, construction, or retail. The deciding factor is whether your existing documentation makes one path easier than the other.
Choose bank statement loans if you don't have a CPA relationship or if your tax returns show minimal income due to write-offs. This works well for cash-heavy businesses or borrowers who comingle personal and business funds.
Choose P&L loans if you already maintain clean books with a CPA and your business shows solid net profit. This path makes sense if you're refinancing and have recent financials prepared for other purposes.
Most Colusa borrowers picking between these options benefit from bank statement loans because they skip the CPA requirement. But if you've got the P&L ready, that route can be faster.
Yes, most lenders accept business bank statements if all your income flows through business accounts. Some programs let you combine both personal and business statements.
CPA-prepared is sufficient for most programs. Full audits aren't required, which keeps costs lower for small business owners.
Rates are comparable between both programs. Your credit score, down payment, and loan-to-value ratio matter more than which documentation type you use.
Yes, if one approach doesn't show enough income, you can try the other. Some borrowers qualify under P&L but not bank statements, or vice versa.
Most programs want at least 12-24 months of history in your current business. Shorter histories make approval harder regardless of documentation type.