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in Inglewood, CA
Both options help Inglewood self-employed borrowers qualify without W-2s. The difference is how lenders verify your income—through tax returns or bank deposits.
Most independent contractors in Los Angeles County can use either program. Your choice depends on how you report income and what shows the stronger earnings picture.
1099 loans verify income through your 1099 forms from the past two years. Lenders average your documented contract income to calculate what you can borrow.
This works well if you claim most income on tax returns. You need consistent 1099 earnings and decent credit—typically 620 minimum, though some lenders go lower.
Rates run higher than conventional loans because of self-employment risk. Down payments start at 10% for most programs, sometimes 15% depending on credit and income strength.
Bank statement loans use 12 to 24 months of business or personal bank deposits to prove income. Lenders calculate your average monthly deposits, then apply an expense factor.
This option shines when you write off heavy expenses that tank your tax return income. Your bank statements show the real cash flow, which is what actually matters for approval.
Expect 10-20% down depending on the deposit strength and credit profile. Rates vary by borrower profile and market conditions but run similar to 1099 programs—both are non-QM pricing.
The core split is tax return income versus bank deposit income. 1099 loans rely on what you report to the IRS. Bank statement loans care about what hits your account.
Approval odds flip based on how you manage tax strategy. Heavy write-offs kill 1099 loan income but don't hurt bank statement approvals—those deposits still count.
Credit standards run similar for both, usually 620 minimum. Down payment requirements overlap heavily. Rates differ more by lender than by program type.
Choose 1099 loans if you claim most income and file clean tax returns. Choose bank statement loans if you maximize deductions and your deposits tell a better earnings story.
Inglewood contractors in construction, entertainment, or consulting often prefer bank statements. Freelancers with straightforward 1099 income can save documentation hassle with 1099 loans.
Run both scenarios with a broker before deciding. SRK CAPITAL shops your file across 200+ lenders to find which program gets you approved at the best terms.
Most self-employed borrowers qualify for one or both options. The right choice depends on your specific tax situation and how your income looks on paper versus in the bank.
Some lenders allow hybrid documentation, but most require one method or the other. A broker can find lenders who accept combined income sources if that strengthens your file.
Rates are similar since both are non-QM products. Your specific rate depends on credit, down payment, and lender—not which program you choose.
Personal accounts work fine if all business deposits run through them. Business accounts can simplify income calculation and sometimes improve approval odds.
Lenders typically want two years of 1099 forms. One year might work with a large down payment and strong credit, but two years is standard.
Bank statement loans average deposits over 12-24 months, so fluctuation is expected. Consistent overall trends matter more than month-to-month swings.