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in Lakewood, CA
Self-employed borrowers in Lakewood face a choice: prove income with bank statements or a CPA-prepared P&L. Both are non-QM loans built for business owners who can't show traditional W-2 income.
The right option depends on how your business runs and what paperwork you already have. One route takes raw deposits from your accounts. The other needs formal financial statements prepared by an accountant.
Bank statement loans use 12 or 24 months of business or personal bank statements to calculate income. Lenders analyze deposits, subtract business expenses at standard rates, then qualify you on the net figure.
No tax returns needed. If you write off heavily or run cash through your accounts, this loan reads actual money movement instead of taxable income. Rates run higher than conventional, typically 1-2% above prime mortgages.
P&L statement loans require a certified public accountant to prepare a year-to-date profit and loss statement. Lenders use the net income shown on that statement to qualify you, often with less scrutiny on cash flow volatility.
This route works when your books are clean and your CPA relationship is solid. You'll still skip traditional tax return verification, but the formal accounting adds credibility that some lenders price better than raw bank statements.
Bank statement loans read raw cash flow. P&L loans read accounting profit. If deposits swing wildly month to month, P&L smooths that out. If you lack a CPA or run a cash-heavy business, bank statements capture income your books might miss.
Pricing often favors P&L when the numbers look stable. But bank statements win when you need speed or don't maintain formal financials. Both require 10-20% down and credit scores around 620-680 depending on the lender.
Choose bank statement loans if you write off aggressively, lack a CPA relationship, or need to close quickly. This route works for contractors, freelancers, and cash businesses where deposits tell the real story better than formal books.
Go with P&L if you maintain clean accounting and your CPA can turn around a statement in two weeks. Lakewood business owners with established practices—medical, legal, consulting—often get better terms this way because the documentation looks institutional.
Yes, if business income runs through personal accounts. Lenders separate business deposits from personal transfers using standard underwriting filters.
Most CPAs deliver a compliant P&L in 1-2 weeks if your books are current. Delays happen when records need cleanup or reconciliation.
Typically yes, 10-20% down depending on credit and property type. Neither offers the 3% down options available on conventional loans.
Bank statements average 12-24 months, smoothing seasonal swings. P&L uses year-to-date, which can hurt if you're in a slow season.
Yes, but expect delays while your CPA prepares statements. Plan documentation strategy before starting the loan process to avoid rate lock issues.