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in Reedley, CA
Both bank statement and P&L loans serve self-employed borrowers who can't verify income through W-2s. The difference is how lenders calculate your qualifying income—and which one works depends on how you run your business.
Reedley's agricultural and small business economy means plenty of 1099 contractors, farmers, and shop owners need these programs. Choosing the wrong documentation route can cost you a lower rate or kill your approval entirely.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate income. Lenders average your monthly deposits and apply that figure to your debt-to-income ratio.
You don't need a CPA or tax returns. This works best if you write off heavy business expenses that tank your taxable income but maintain strong cash flow through your accounts.
P&L statement loans require a CPA-prepared profit and loss statement covering 12 to 24 months. Lenders use your net profit figure to determine qualifying income.
You still avoid full tax return scrutiny, but you need a licensed accountant to sign off. This route works if your P&L shows stronger income than your bank deposits suggest.
Bank statement loans look at gross deposits. P&L loans look at net profit after expenses. If you run a high-volume, low-margin business, bank statements usually qualify you for more.
Cost and timeline differ too. Bank statement programs don't require a CPA, saving you prep fees and weeks of back-and-forth. P&L loans demand professional accounting, which adds expense but can justify higher income if your books are clean.
Choose bank statements if you write off everything, keep solid cash flow, and want to avoid CPA fees. This fits most Reedley contractors, truckers, and cash-heavy retail businesses.
Go with P&L if your accountant already maintains detailed books and your net profit beats your deposit pattern. Farm operations with equipment depreciation often look better on paper than in the bank.
No. Lenders pick one income calculation method per application. You choose which documentation route to submit based on which shows stronger qualifying income.
Yes. Both typically need 10-20% down depending on credit score and property type. The documentation difference doesn't change equity requirements.
Rates are similar since both are non-QM products. Your credit score and down payment matter more than which income documentation you use.
Bank statement loans close faster—usually 21-30 days. P&L loans add time for CPA preparation and verification, often pushing to 30-45 days.
Yes. Lenders average income over 12-24 months to smooth seasonal fluctuations. Bank statements work better if deposits vary widely month to month.