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in Lynwood, CA
Self-employed borrowers in Lynwood face a common problem: traditional lenders want W-2s you don't have. Both bank statement and P&L loans solve this by using alternative income verification.
The right choice depends on how clean your bank accounts are and whether you have a CPA relationship. Most self-employed buyers qualify for one but not both.
Bank statement loans use 12 or 24 months of personal or business bank statements to calculate your income. Lenders average your deposits and subtract estimated expenses to determine what you qualify for.
You don't need a CPA or formal bookkeeping. Your actual cash flow proves your income, which helps borrowers who write off most earnings or run cash-heavy businesses.
Expect rates 1-2% higher than conventional loans. Credit minimums start at 620, though 680+ gets better pricing and terms.
P&L loans require a CPA-prepared profit and loss statement covering 12-24 months. Your accountant must be licensed and willing to verify the financials they prepared.
This works best if you already work with a CPA for your business. The documentation looks more traditional to lenders, which sometimes means slightly better rates than bank statement options.
You still need decent credit, typically 640 minimum. Lenders verify your CPA's credentials and may request additional business documentation beyond the P&L itself.
The core split is documentation style. Bank statement loans analyze raw cash flow from your accounts. P&L loans rely on professionally prepared financials that show net profit.
Bank statement programs work for anyone with 12-24 months of deposits, even without formal bookkeeping. P&L loans require an established CPA relationship and proper accounting records.
Rates vary by borrower profile and market conditions. P&L loans sometimes price 0.25-0.5% lower because the documentation looks cleaner to underwriters, but this isn't guaranteed across all lenders.
Choose bank statement loans if you don't use a CPA, run a cash business, or write off most income. This works for contractors, real estate agents, and small business owners who keep simple books.
Go with P&L loans if you already pay a CPA to prepare detailed financials and your books show solid net profit. This suits established businesses with clean accounting and formal recordkeeping.
Many Lynwood self-employed buyers default to bank statements because they're simpler to document. But if your CPA already prepares annual P&Ls, that route often costs less and moves faster through underwriting.
Yes, most bank statement programs let you combine personal and business accounts. Lenders average deposits across all accounts you provide.
Your CPA must be licensed and in good standing. Lenders verify their credentials directly and may request proof of license.
Bank statement loans typically close in 21-30 days. P&L loans can match this if your CPA responds quickly to verification requests.
Yes, but it restarts underwriting. We recommend choosing the right program upfront based on your documentation readiness.
Both work for investment properties. Bank statement loans are more common for investors because they don't require CPA preparation.