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in Inglewood, CA
Self-employed borrowers in Inglewood face a choice: prove income with bank statements or with a CPA-prepared P&L. Both are non-QM loans designed for business owners and freelancers who can't show traditional W-2s.
The right option depends on how you run your books and what documentation you already have. One requires no CPA involvement. The other can show higher income if you write off heavily.
Bank statement loans use 12 or 24 months of personal or business bank deposits to calculate your income. Lenders add up your deposits and apply a percentage (typically 50-75%) to account for business expenses.
No CPA required. You provide bank statements directly to the lender. This works best if you keep clean records and don't heavily comingle personal and business funds.
Most lenders require 10-20% down, 620+ credit, and debt-to-income ratios under 50%. Rates run 1-2% higher than conventional loans. Rates vary by borrower profile and market conditions.
P&L statement loans use a CPA-prepared profit and loss report to verify income. The lender reviews your net income from the P&L, not your tax returns. This matters if you write off significant expenses.
You need a CPA to prepare and sign the P&L covering 12-24 months. The CPA must be licensed and independent. Some lenders also want a balance sheet and a letter from the CPA confirming the business exists.
Credit and down payment requirements mirror bank statement loans: 10-20% down, 620+ credit. The advantage shows up when your P&L reflects higher income than your bank deposits would suggest.
The core difference is proof source. Bank statements show actual cash flow. P&L statements show business profitability on paper. If you write off 40% of revenue, your P&L will show more income than your bank deposits.
Bank statement loans cost nothing extra to prepare. P&L loans require paying a CPA for the statement, typically $500-2,000 depending on business complexity. But that cost can unlock higher loan amounts.
Approval speed favors bank statements. You likely already have 12 months of statements. A CPA needs time to prepare a compliant P&L. Expect 2-4 weeks longer for P&L loan approval.
Choose bank statement loans if you keep clean records, don't write off heavily, and want the fastest path to approval. Best for freelancers, gig workers, and sole proprietors with straightforward finances.
Choose P&L loans if you maximize tax deductions and your business shows strong profitability on paper. Works well for established businesses with existing CPA relationships and complex expense structures.
Most Inglewood self-employed borrowers start with bank statements because they're simpler. But if your business grosses $300K and you write off $150K, a P&L loan can double your qualifying income. We run both scenarios before you pick.
Yes, most lenders accept business statements. Some prefer a mix of both to verify the full income picture.
No, any licensed CPA works. They must be independent and cannot be a family member or business partner.
Rates are similar for both. Your credit score and down payment affect pricing more than which non-QM route you choose.
Yes, but it restarts underwriting. We recommend choosing upfront based on which shows stronger qualifying income.
Most lenders want 12-24 months of self-employment history. Some accept newer businesses with 12 months of strong deposits or P&L.