Loading
in Rosemead, CA
Both options let self-employed borrowers qualify without tax returns. Bank statement loans pull income straight from your deposits over 12 or 24 months.
P&L loans rely on a CPA-prepared profit and loss statement instead. The choice depends on how you run your books and what paperwork you already have.
Bank statement loans analyze your business or personal account deposits. Lenders typically average your monthly deposits and apply an expense factor—usually 25% to 50%.
You need 12 or 24 months of consecutive statements. Most lenders want 10% to 20% down and credit scores around 620 or higher.
This works best if you run deposits through one or two accounts. Mixed personal and business transactions get messy and slow underwriting down.
P&L loans use a CPA-prepared profit and loss statement to document income. Your accountant creates a detailed report showing revenue minus expenses.
You still need a full tax return in most cases, but the P&L gives underwriters a clearer current income picture. This matters if your most recent year shows stronger earnings.
Down payments start around 10% to 15%. Credit requirements sit near 620, though some lenders go higher depending on the loan amount.
Bank statement loans let you avoid involving a CPA if you don't already use one. P&L loans require a licensed accountant to prepare your statement.
Bank statements show actual cash flow but don't account for legitimate business expenses the way a P&L does. If you write off heavily, a P&L might show higher qualifying income.
Processing time differs too. Bank statement loans often close faster because there's less back-and-forth with accountants. P&L loans can stretch if your CPA is slow or the statement needs revisions.
Choose bank statements if you keep clean deposit records and don't want to involve an accountant. It's the simpler path when your income is obvious from your accounts.
Go with a P&L if you already work with a CPA and take significant deductions. You'll likely qualify for more because the P&L reflects your true net income instead of gross deposits minus a flat expense factor.
Most Rosemead self-employed borrowers pick based on what they already have ready. If your accountant prepares quarterly P&Ls anyway, use those. If not, pull bank statements and move forward.
Some lenders allow it, but most programs require one or the other. Using both can slow underwriting as lenders reconcile conflicting income pictures.
Most lenders require a licensed CPA or enrolled agent. A bookkeeper or non-credentialed accountant usually won't meet program requirements.
Rates are nearly identical since both are non-QM programs. Your credit score and down payment matter more than which documentation you choose.
Typically 12 or 24 months consecutive. Lenders won't accept cherry-picked months or statements with gaps.
Lenders will question the discrepancy. You'll need to explain the difference or switch to a bank statement program that doesn't rely on the P&L.