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in Lakeport, CA
Self-employed borrowers in Lakeport face a common problem: your tax returns don't show enough income to qualify. Both bank statement and P&L loans solve this, but they verify income differently.
Bank statement loans use deposits from your business account. P&L loans use a CPA-prepared financial statement. The right choice depends on how you run your business and what documentation you already have.
Bank statement loans pull income directly from 12 or 24 months of business deposits. Lenders calculate your qualifying income from the average monthly deposits, minus an expense ratio.
This works well for contractors, consultants, and small business owners who show strong cash flow. You don't need a CPA or formal financials. Just provide statements from your business checking account.
Most lenders require 10-20% down and credit scores above 620. Rates run 1-2% higher than conventional loans. Rates vary by borrower profile and market conditions.
P&L loans use a CPA-prepared profit and loss statement to verify income. The statement covers 12 months and shows your business revenue minus expenses.
This option fits borrowers who already work with a CPA for their business. You'll also need a year-to-date P&L and a balance sheet. Some lenders require business bank statements too.
Credit and down payment requirements match bank statement loans. Rates are similar—expect to pay 1-2% above conventional rates. You need at least two years of self-employment history.
The biggest difference is documentation. Bank statement loans need just your account statements. P&L loans require formal financials prepared by a licensed CPA.
Bank statement loans work faster if you don't already have CPA-prepared books. P&L loans make sense if you maintain detailed financials for your business anyway.
Income calculation differs too. Bank statements use gross deposits minus an expense factor. P&L loans use net profit from your financial statement. This can create big swings in qualifying income depending on your business structure.
Choose bank statement loans if you run a cash-heavy business without formal books. Contractors, consultants, and service businesses with steady deposits qualify easily.
Go with P&L loans if you already work with a CPA and maintain detailed financials. This works well for businesses with complex structures or multiple revenue streams.
Both options get you approved when tax returns show too many write-offs. The choice comes down to which documentation you already have or can obtain quickly.
Some lenders accept personal statements if you deposit business income there. Most prefer dedicated business accounts to clearly show business cash flow.
Expect to pay $500-$2,000 depending on business complexity. If you already file business taxes with a CPA, they can usually generate it quickly.
Rates are nearly identical between the two programs. Your credit score and down payment matter more than which documentation method you choose.
Most lenders offer both options. Using 24 months can increase your qualifying income if your business has grown over time.
Yes. If your bank statements don't show enough income, you can provide P&L statements instead. We see this happen when deposits include transfers or reimbursements.