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in Bellflower, CA
Both options let self-employed Bellflower borrowers qualify without tax returns. The main difference is what you use to prove income: personal or business bank statements versus a CPA-prepared P&L.
Most self-employed borrowers lean toward bank statement loans because they're simpler to document. P&L loans work better if you have clean books and want to show full business income without personal deposits muddying the picture.
Bank statement loans use 12 or 24 months of personal or business bank deposits to calculate income. Lenders take total deposits, subtract non-income items like transfers, then divide by the number of months reviewed.
You need 10-20% down, 620+ credit, and bank statements showing consistent deposits. Most Bellflower contractors and gig workers prefer this route because they already have the statements and don't need to hire a CPA.
P&L statement loans require a CPA-prepared profit and loss statement covering 12-24 months. The lender uses your net business income from the P&L to qualify you, sometimes adding back depreciation and other non-cash expenses.
You still need 10-20% down and 620+ credit. This option makes sense if you keep detailed books, work with a CPA already, and want to show business income separately from personal cash flow.
Bank statement loans look at cash flow through your accounts. P&L loans look at business profitability on paper. If you mix business and personal funds or have irregular deposits, bank statements usually show higher qualifying income.
P&L loans give you more control over what income gets reported since your CPA prepares the statement. Bank statement lenders see everything that hits your account, which can work for or against you depending on your deposit patterns.
Choose bank statement loans if you don't work with a CPA, mix personal and business funds, or have side income streams hitting your accounts. Most Bellflower real estate agents, Uber drivers, and small contractors go this route.
Go with P&L loans if you maintain separate business accounts, already prepare annual P&Ls, and want to highlight business profitability over raw deposits. Works well for established LLCs and S-corps with clean bookkeeping.
No, lenders use one method or the other. You pick the approach that shows your income in the best light based on how you track your business finances.
Rates are nearly identical between the two. Your credit score, down payment, and property type matter more than whether you use bank statements or a P&L.
Not always, but it helps. Bank statement loans care more about deposit history than business registration, while P&L loans assume you have formal business accounting.
Most lenders want 12 or 24 months. The 24-month option sometimes gets better pricing because it shows longer income stability.
No. Lenders require a licensed CPA to prepare and sign the profit and loss statement to ensure accuracy and prevent income manipulation.