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in Culver City, CA
Self-employed buyers in Culver City face a choice: prove income with bank statements or a CPA-prepared P&L. Both are non-QM loans designed for business owners who write off most of their taxable income.
The difference comes down to how you document earnings and who prepares your financials. Your choice affects approval speed, loan cost, and whether you need a CPA relationship.
Bank statement loans analyze 12 or 24 months of business or personal bank deposits. Lenders calculate average monthly income by reviewing total deposits and subtracting transfers or non-income items.
You skip tax returns entirely. Most programs accept either business statements or personal accounts where revenue flows through. This works well for gig workers, contractors, and anyone who doesn't use a CPA.
P&L statement loans require a CPA-prepared profit and loss statement covering 12-24 months. The CPA must be licensed and independent—family members don't count.
Lenders use the P&L to calculate qualifying income based on your business's net profit. This approach works best for established businesses with clean accounting and existing CPA relationships.
Bank statement loans close faster because you're just gathering deposits. P&L loans take longer since your CPA needs to prepare formal statements and possibly a year-end review.
Rates favor P&L loans by about 0.25-0.50% because CPAs add credibility. But you'll pay $1,500-$3,000 for CPA prep if you don't already have those financials. Bank statements come free from your bank in 48 hours.
Choose bank statements if you don't use a CPA, run multiple income streams through one account, or need to close quickly. Freelancers, gig workers, and cash-heavy businesses do well here.
Pick P&L loans if you already have a CPA relationship and clean books. The rate savings can offset preparation costs on larger Culver City purchases where a 0.5% rate difference matters.
No. Lenders require you to pick one income documentation method. You can't combine programs to maximize qualifying income.
It depends on your finances. Bank statements work better if deposits exceed P&L net profit. Run both calculations before choosing.
Most lenders require proof of self-employment for 12-24 months. A business license helps but isn't always mandatory for bank statement programs.
No. Lenders require a licensed CPA signature. Bookkeeper-prepared statements don't meet program guidelines.
Both handle jumbo amounts. P&L loans may offer better rates on larger balances if your CPA costs are already sunk.