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in Coalinga, CA
Both loan types solve the same problem: getting approved without W-2s. The difference is how you prove income to the lender.
Bank statement loans pull numbers from deposits. P&L loans rely on your CPA's financial statements. Most Coalinga self-employed borrowers qualify for one but not both.
Bank statement loans analyze 12 or 24 months of business or personal account deposits. Lenders calculate average monthly income, then qualify you based on that number.
You skip tax returns entirely. No need to explain write-offs or business deductions. If cash flows through your accounts, that's your income.
P&L loans require a CPA-prepared profit and loss statement covering 12-24 months. Your accountant signs off on business earnings, and that becomes your qualifying income.
Most lenders also want a balance sheet and business license. Some require interim statements if your last P&L is over 90 days old.
Bank statement loans cost less upfront. You don't pay a CPA to prepare financial statements. P&L loans require hiring an accountant if you don't already use one.
Income calculation differs completely. Bank statements show gross deposits, which can inflate income if you're moving business revenue through personal accounts. P&L loans reflect net profit after expenses, which often qualifies you for less.
Choose bank statements if your deposits exceed what your tax returns show. This works for contractors, real estate agents, and small business owners who write off most income.
Go with P&L if you already have a CPA preparing monthly financials. Also better if you mix business and personal deposits heavily, since P&L isolates actual business profit.
No. Lenders require one income documentation method per file. You pick bank statements or P&L at application, not both.
Bank statements usually show higher income since they count gross deposits. P&L reflects net profit, which is lower after expenses.
Yes. Most lenders want 620 minimum for either option. Better credit gets better rates on both programs.
Bank statement loans close faster. P&L loans add time for CPA verification and balance sheet review, usually 5-7 extra days.
Yes, but it restarts underwriting. Switching documentation types means re-calculating income and re-submitting the file from scratch.