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in Glendale, CA
Glendale's self-employed borrowers have two main paths to prove income without tax returns. Both bank statement and P&L loans serve entrepreneurs, but they pull income data from different places.
Bank statement loans scan your deposits over 12-24 months. P&L loans rely on a CPA-prepared financial statement. The choice depends on how your business handles cash flow and what documentation you already maintain.
Bank statement loans calculate income from your business account deposits. Lenders average 12 or 24 months of statements and apply an expense ratio, usually 25-50%, to estimate what you actually keep.
This works well if you run consistent deposits through one account. No CPA needed. You just upload PDFs of your bank statements and the underwriter does the math.
P&L loans require a licensed CPA to prepare your profit and loss statement. The CPA certifies your business income and expenses, giving lenders a cleaner picture of profitability.
This route makes sense if you already work with a CPA for your business. The statement typically covers 12-24 months. Some lenders accept statements from enrolled agents, but most want a CPA signature.
Bank statement loans are faster and cheaper upfront since you skip the CPA fee. But lenders apply a standard expense ratio that might undercount your actual income if you run a low-margin business.
P&L loans cost more to prepare but let you document real expenses. If you write off a lot or have multiple income streams, a CPA statement usually shows higher qualifying income. Rates and down payment requirements are similar for both, typically 10-20% down and rates 1-2% above conventional.
Choose bank statements if you deposit most revenue into one account and want to move fast. This works for freelancers, contractors, and small business owners with straightforward cash flow.
Go with a P&L if you already maintain CPA-prepared books or run a business with complex expenses. Restaurants, medical practices, and companies with inventory usually qualify for more using a P&L because they can document costs accurately.
Yes, most lenders accept either. Business accounts work best, but sole proprietors often use personal accounts for deposits.
No, the CPA-prepared P&L replaces tax returns. You won't need to submit 1040s or business returns.
P&L loans usually win if you have documented expenses over 50% of revenue. Bank statement loans apply a fixed expense ratio.
Bank statement loans close in 3-4 weeks. P&L loans add a week if you need to order the statement from your CPA.
Yes, both require 10-20% down minimum. Investment properties need 20-25% down regardless of income documentation.