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in Willows, CA
Self-employed borrowers in Willows face a choice: prove income with bank statements or with a CPA-prepared P&L. Both are non-QM loans designed for business owners who can't use tax returns.
The right choice depends on how your business is structured and what documentation you already have. Many ag operators and small business owners in Glenn County qualify for either program.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate income. Lenders apply an expense factor—typically 25% to 50%—then qualify you on what remains.
This works well for cash-heavy businesses like farming operations, contractors, or retail shops. You don't need a CPA or formal financial statements. Most lenders require 10% to 20% down and credit scores above 620.
P&L statement loans use a 12 to 24-month profit and loss statement prepared by a licensed CPA. The lender qualifies you based on your net business income after expenses.
This option fits borrowers who already work with a CPA and have clean books. It often delivers higher qualifying income than bank statements for service businesses with lower cash flow. Expect similar down payment and credit requirements.
Bank statements show what went through your accounts. P&L statements show what your business earned after expenses. The first reflects cash flow; the second reflects profit.
Bank statement loans cost less upfront—no CPA fees. But the expense factor can reduce your qualifying income more than actual business expenses. P&L loans require paying a CPA but may yield higher approval amounts if your expenses are already documented.
Choose bank statements if you run a cash business, don't use a CPA, or need to close quickly. This works for most Willows ag operators, local contractors, and retailers who keep personal and business funds separate.
Choose P&L if you already have a CPA, maintain detailed books, or run a service business with significant documented expenses. Rates vary by borrower profile and market conditions for both programs.
Yes, most lenders accept business accounts. Some prefer to see both if you mix personal and business deposits.
The CPA must be licensed and in good standing. California licensure isn't required, but the CPA must be actively licensed somewhere.
It depends on your business structure. Run both scenarios—bank statement with expense factor vs. P&L net income—to see which qualifies you for more.
Yes, but it resets underwriting. Most brokers run both calculations upfront to choose the stronger option before submitting.
Absolutely. Many Willows ag operators use bank statements due to seasonal cash flow. P&L works if you already prepare annual financials.