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in Hanford, CA
Self-employed borrowers in Hanford face a choice: prove income with bank statements or a CPA-prepared P&L. Both are non-QM loans designed for business owners who can't show traditional W-2 income.
Your choice depends on how you run your books and what documentation you already have. Most Hanford entrepreneurs find one path significantly easier than the other based on their accounting setup.
Bank statement loans use 12 to 24 months of business or personal bank deposits to calculate income. Lenders analyze cash flow patterns rather than what you report to the IRS.
This works well for Hanford business owners who write off heavy expenses but maintain strong cash flow. You don't need a CPA or formal financial statements—just consistent deposits that prove your earning capacity.
P&L statement loans require a licensed CPA to prepare a profit and loss statement covering your business performance. The CPA certifies your income without a full audit.
This path suits Hanford borrowers who already work with a CPA for business planning or complex entities. The formal statement often qualifies higher income than bank deposits alone would show.
Bank statements cost nothing extra to obtain—you already have them. P&L loans require paying a CPA for preparation, usually $500 to $2,000 depending on business complexity.
Income calculation differs significantly. Bank statement lenders apply a percentage to deposits—often 50% to 75% to account for expenses. P&L statements show net profit directly, which can qualify you for more house if your margins are strong.
Choose bank statements if you don't currently use a CPA or run a simple business structure. This path closes faster because you're not waiting on professional preparation.
Pick the P&L route if you already maintain CPA-prepared books or operate multiple entities. The higher qualifying income often offsets the preparation cost, especially for Hanford properties above $400,000.
No, lenders use one method or the other for income calculation. You pick the approach that shows your income most favorably.
Rates vary by borrower profile and market conditions, but both sit in similar non-QM pricing tiers. Your credit score and down payment affect rate more than documentation type.
P&L loans work better for seasonal businesses or inconsistent cash flow. The CPA can explain fluctuations in a way raw deposits cannot.
Your CPA must hold an active license in good standing. They don't need mortgage-specific training, just standard P&L preparation skills.
Most programs require 12 months minimum. Using 24 months sometimes qualifies higher income by showing sustained business performance.