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in La Verne, CA
Both bank statement and P&L loans let self-employed borrowers in La Verne qualify without tax returns. The difference comes down to how you document income and what your CPA has already prepared.
Bank statement loans pull income directly from deposits over 12-24 months. P&L loans use a CPA-prepared profit and loss statement, which means your accountant does the heavy lifting upfront.
Bank statement loans calculate income from your business or personal account deposits. Lenders average deposits over 12 or 24 months and apply an expense ratio—typically 25% to 50% depending on your business type.
You need consistent deposits and enough account history. Most lenders want to see the same income pattern for at least a year, and you'll qualify for higher loan amounts if your deposits are steady or growing.
P&L loans rely on a CPA-prepared profit and loss statement covering 12-24 months. Your accountant signs off on the numbers, and lenders use net income from the statement to calculate qualifying income.
This option works well if you already have updated financials and a CPA relationship. Lenders typically require the CPA to be licensed and may verify credentials before approving the loan.
Bank statement loans show raw cash flow—what actually hits your accounts. P&L loans reflect net income after expenses, which means your accountant's expense categorization directly impacts your qualifying income.
If you write off aggressively and deposits stay high, bank statements usually show more income. If your books are clean and net income looks strong, a P&L might get you better terms since it's a more formal financial document.
Go bank statement if you don't have recent P&L statements or your tax strategy buries net income under expenses. This route works for contractors, real estate agents, and business owners who maximize write-offs.
Choose P&L if your accountant keeps updated financials and your net income supports the loan amount you need. It's often cleaner documentation and some lenders price it slightly better since a CPA vouches for the numbers.
No, lenders require one income documentation method per loan. You pick the approach that shows your income in the strongest light.
Yes, both typically need 10-20% down depending on credit score and property type. Higher down payments can improve your rate.
Bank statement loans often close quicker since you don't wait on CPA preparation. P&L loans move fast if financials are already current.
Bank statement loans become your best option. You skip the CPA requirement entirely and qualify based on deposit history alone.
Yes, both support investment property purchases. Lenders may adjust down payment requirements and rates based on property use.