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in San Dimas, CA
Self-employed borrowers in San Dimas face a choice: prove income with bank statements or a CPA-prepared P&L. Both non-QM options skip tax returns, but they require different documentation and suit different business structures.
Bank statement loans pull 12-24 months of deposits from your business or personal accounts. P&L loans require a certified profit and loss statement from a licensed CPA. The right choice depends on how you run your books and what your accountant already prepares.
Bank statement loans analyze deposits flowing through your business or personal accounts. Lenders calculate income by averaging monthly deposits, often applying a 50% expense ratio unless your statements show otherwise.
This works well if you run most revenue through one or two accounts. You need consistent deposit patterns and at least 12 months of statements. Some lenders accept 12 months, others require 24 for stronger qualification.
P&L loans rely on a certified profit and loss statement prepared by a licensed CPA. The statement shows revenue minus expenses, giving lenders your net business income. Your accountant must sign off and often provide a certification letter.
This route makes sense if you already work with a CPA who prepares detailed financials. It captures income that might not flow through one account, like client payments spread across multiple channels or revenue not yet deposited.
Bank statement loans cost less upfront since you skip the CPA fees. P&L loans require paying an accountant to prepare and certify your statement, adding $500-$2,000 to closing costs depending on complexity.
Income calculation differs significantly. Bank statements use deposit totals with assumed expenses. P&L statements show actual profit after real business costs. If you have high documented expenses, a P&L may qualify you for more. If expenses are low, bank statements might show stronger income.
Choose bank statement loans if you run a straightforward business with most income hitting one or two accounts. This works for contractors, consultants, and small service businesses without complex bookkeeping. You save on CPA fees and can move faster.
Go with P&L loans if you already maintain detailed books, work with a CPA quarterly, or have legitimate high expenses that reduce your net income. This suits established businesses with multiple revenue streams or borrowers who need to document specific costs that bank deposits don't reflect.
Yes, if you're a sole proprietor or run income through personal accounts. Lenders accept personal statements showing consistent business deposits from clients or customers.
Your accountant must be a licensed CPA in good standing. Some lenders require a certification letter alongside the P&L statement confirming they prepared the financials.
Rates vary by borrower profile and market conditions. Both loan types price similarly since they're non-QM products. Your credit score and down payment matter more than documentation type.
Yes, but it restarts underwriting. If your bank statements don't show enough income, a P&L might work better. Discuss options with your broker before starting.
Most lenders require 12 months minimum. Some programs accept 12-month statements, others mandate 24 months for stronger income documentation and lower rates.