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in Parlier, CA
Both options prove income without tax returns. The difference is what your lender reviews to calculate what you can borrow.
Bank statement loans pull deposits straight from your checking account. P&L loans use a CPA's financial summary instead.
Most Parlier self-employed borrowers pick based on how they run their books. Clean statements favor bank statement loans. Detailed accounting favors P&L.
Lenders review 12 to 24 months of business or personal bank statements. They calculate average monthly deposits, then subtract a percentage for expenses.
No CPA required. You submit statements showing consistent cash flow. Lenders typically allow 50% to 75% of deposits as qualifying income.
This works well for contractors, real estate agents, and small business owners with straightforward banking. Approval depends on steady deposit patterns.
A licensed CPA prepares a profit and loss statement covering 12 to 24 months. Lenders use the net profit figure to qualify your income.
This route works when your bank statements don't tell the full story. Maybe you move money between accounts or handle cash transactions.
P&L loans suit established businesses with proper accounting systems. You need a CPA relationship and organized financial records.
Bank statement loans cost less upfront because you skip the CPA fee. P&L loans add $500 to $2,000 for professional preparation.
Approval speed differs too. Bank statements process faster since lenders just review deposits. P&L loans wait on CPA turnaround time.
Income calculation varies. Bank statement lenders deduct 25% to 50% for expenses. P&L shows actual net profit after all business costs.
Which shows higher income depends on your write-offs. Heavy deductions favor bank statements. Low expense ratios favor P&L.
Choose bank statements if deposits clearly show your income. Works best for service businesses without complex accounting needs.
Pick P&L if you write off significant expenses or manage multiple income streams. Also better when bank activity doesn't reflect true profitability.
Most Parlier ag-related businesses lean toward P&L because seasonal income and equipment costs complicate bank statement review. Service providers often prefer bank statements for simplicity.
Yes. Most lenders accept either or both. Business accounts work better when you want to separate personal spending from income verification.
No audit required. The CPA prepares and signs the statement. Full audits cost significantly more and aren't necessary for mortgage approval.
Rates are similar since both are non-QM loans. Your credit score and down payment matter more than which documentation method you choose.
Most lenders require 12 months minimum. Some accept 24 months to show longer income history and improve qualification amounts.
Yes, but it restarts underwriting. The lender recalculates income using different methods. Expect delays when changing documentation types.