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in Gardena, CA
Self-employed borrowers in Gardena face a common problem: solid income that doesn't show up on tax returns. Both 1099 and bank statement loans solve this, but they approach verification differently.
1099 loans use your contractor income statements directly. Bank statement loans pull income from deposits. The right choice depends on how you structure your business and what's cleanest to prove.
1099 loans use your contractor income forms to calculate qualifying income. Lenders review your 1099s from the past two years and average your gross receipts. This works best if you have consistent contractor relationships.
You'll typically need 600+ credit and 15-20% down. The verification is straightforward: lenders see your 1099 income directly without needing to parse bank deposits or estimate business expenses.
Bank statement loans calculate income from 12-24 months of business or personal account deposits. Lenders apply an expense factor to estimate your net income. This works for any self-employed structure.
Most programs require 10-20% down with 600+ credit. The flexibility helps if your 1099s don't tell the full story—maybe you have cash deposits, mixed income sources, or profits that don't show up on contractor statements.
1099 loans need clean contractor income on official forms. Bank statement loans look at what actually hits your account. If you write off most income on taxes, bank statements show higher qualifying amounts.
Documentation differs sharply. 1099 route requires those forms plus a profit and loss statement. Bank statements need every page from checking accounts—transfers between accounts can complicate the math. Rates vary by borrower profile and market conditions.
Choose 1099 loans if most income shows up on contractor forms and you don't heavy write-offs. This path has less paperwork and faster underwriting. Gardena contractors with steady 1099 relationships from a few clients fit perfectly.
Pick bank statements if you're an LLC, have multiple income streams, or write off significant expenses. Bank deposits capture income that contractor forms miss. This matters for Gardena business owners managing both service income and product sales through the same accounts.
Some lenders allow hybrid approaches, but most require you to pick one verification method. Mixing documentation types complicates underwriting and often delays approval.
1099 loans typically close quicker because there's less documentation to review. Bank statement loans need every page analyzed for deposits, which adds 5-7 days to underwriting.
No. You can use personal bank statements if that's where business income deposits. Lenders apply expense factors either way to calculate qualifying income.
Lenders average the past two years, so a down year hurts your qualifying amount. Bank statements might show stronger recent deposits if business recovered.
Rates vary by borrower profile and market conditions, but similar credit and down payment produce comparable pricing. Documentation type matters less than your overall risk profile.