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in Pomona, CA
Self-employed borrowers in Pomona face a choice: prove income with bank statements or a CPA-prepared P&L. Both are non-QM loans designed for business owners who can't show traditional W-2 income.
The right choice depends on how you run your business and what documentation you already have. Most borrowers don't need both—one will fit your situation better.
Bank statement loans calculate income from 12 or 24 months of business or personal bank deposits. Lenders look at total deposits, subtract estimated business expenses, and arrive at qualifying income.
You don't need a CPA or formal accounting. If you run cash through your accounts consistently, bank statements tell the income story. Most lenders use either 12 months (stricter) or 24 months (more forgiving average).
P&L statement loans require a CPA-prepared profit and loss report covering 12 to 24 months. The CPA must be licensed and independent—your cousin who does taxes on the side won't qualify.
This route works if you already maintain detailed books and have a CPA relationship. Lenders verify the CPA's credentials and may request a balance sheet or additional financial statements.
Bank statement loans calculate income directly from deposits. P&L loans rely on net profit reported by your accountant. If you write off heavy expenses, your P&L might show lower income than your bank statements.
Documentation burden differs sharply. Bank statements require nothing beyond the statements themselves. P&L loans demand a licensed CPA, formal financials, and often a CPA letter verifying business ownership.
Choose bank statements if you don't have a CPA or prefer simpler documentation. This works for contractors, consultants, and small business owners who run consistent deposits but don't maintain formal books.
Go with P&L if you already work with a CPA and maintain detailed financials. This option makes sense for established businesses with formal accounting—especially if your P&L shows higher income than raw deposits would suggest.
Yes. Many lenders accept personal bank statements if your business income flows through personal accounts. They'll still deduct estimated expenses.
Usually not. The CPA-prepared P&L replaces tax returns, though some lenders may ask for business tax returns to verify the CPA's numbers.
Rates are similar. Both are non-QM loans priced on credit, down payment, and income strength—not documentation type.
Most lenders use 50% to 75% of deposits as qualifying income. The percentage depends on your business type and expense profile.
Switching mid-process restarts underwriting. Choose your documentation path before applying to avoid delays and re-verification.