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in Downey, CA
Self-employed borrowers in Downey face a simple choice: prove income with bank statements or with CPA-prepared P&L statements. Both are non-QM loans that skip traditional tax returns, but they verify your earnings differently.
Most borrowers qualify for both options. Your choice depends on how you manage cash flow, how much you write off, and whether you already work with a CPA.
Bank statement loans use 12 to 24 months of personal or business bank statements to calculate income. Lenders take total deposits, subtract certain transfers and duplicates, then apply a percentage based on your business type.
This works well if you show consistent deposits and don't transfer money between accounts frequently. No CPA required—just clean bank records that reflect real earnings.
P&L statement loans require a profit and loss statement prepared by a licensed CPA covering 12 to 24 months. The CPA certifies your business income and expenses, giving lenders a clearer picture of actual profitability.
This approach works if you already maintain detailed books and have a CPA relationship. Lenders trust certified financials more than raw deposits, which sometimes means better loan terms.
Bank statement loans look at deposits. P&L loans look at profit after expenses. If you write off aggressively, bank statements show higher income. If you run lean books with low expenses, P&L statements might show more.
Cost and speed also differ. Bank statement loans move faster because you're not waiting on CPA prep work. P&L loans take longer but sometimes price better because lenders view certified financials as lower risk.
Choose bank statement loans if you don't have a CPA, need to close quickly, or take heavy business deductions that reduce taxable income. This route works for contractors, consultants, and gig workers with straightforward deposit patterns.
Go with P&L loans if you already maintain detailed books, work with a CPA year-round, or want to show profitability that's cleaner than raw deposits. This fits established businesses with formal accounting systems.
No. Lenders require one income verification method per application. Pick the one that shows your highest qualifying income.
Yes. Both are non-QM loans with similar down payment requirements, typically 10-20% depending on credit score and property type.
Bank statement loans close faster because you don't wait for CPA preparation. Expect 21-30 days versus 30-45 days for P&L loans.
P&L loans sometimes price slightly better because certified financials reduce lender risk. The difference is typically 0.125% to 0.25%.
Not always. Some lenders require business documentation, but many accept independent contractors and gig workers without formal business entities.