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in Duarte, CA
Both loan types solve the same problem for self-employed borrowers in Duarte: getting approved without W-2s or tax returns. The difference is how you prove income.
Bank statement loans analyze deposits over 12-24 months. P&L loans rely on a CPA's profit and loss statement. Most borrowers qualify for one but not both.
Bank statement loans use your actual deposits to calculate income. Lenders review 12 or 24 months of statements from business or personal accounts. They average deposits and apply an expense ratio, usually 25-50%.
This works well for cash-heavy businesses or borrowers who write off most income. You don't need a CPA or formal books. Duarte contractors and small business owners use this route frequently.
P&L loans require a CPA-prepared profit and loss statement covering one or two years. The CPA must be licensed and sign off on the numbers. Lenders verify your income based on reported profit, not deposits.
This route suits established businesses with clean accounting. If you already work with a CPA for taxes or compliance, you have what you need. The underwriting process is faster than bank statement programs.
Bank statement loans look at cash flow. P&L loans look at reported profit. If your deposits exceed your reported income, bank statements show more. If you report clean profit but move money between accounts, P&L works better.
Documentation is the other split. Bank statements are easier to gather but take longer to underwrite. P&L loans need a licensed CPA, which adds cost upfront but speeds approval. Rates vary by borrower profile and market conditions, but both programs price similarly.
Choose bank statements if you write off most income, operate a cash business, or don't have a CPA relationship. This fits Duarte landscapers, sole proprietors, and anyone whose deposits tell a better story than tax returns.
Go with P&L if you already work with a CPA and report solid profit. This suits established S-corps, LLCs with partners, or anyone who needs a faster close. If your accountant prepares financials quarterly, you're already set up for P&L approval.
Yes, if you're a sole proprietor or mix business and personal funds. Many Duarte self-employed borrowers use personal accounts to qualify.
The CPA must be licensed somewhere in the U.S. and willing to verify your P&L. Most lenders accept CPAs from any state.
Rates are similar across both programs. Your credit score and down payment affect pricing more than documentation type.
Yes, but it restarts underwriting. Choose your documentation route before applying to avoid delays in closing your Duarte purchase.
Both programs support purchase and refinance transactions. Cash-out limits depend on the lender and your equity position.