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West Covina's small business owners and 1099 contractors face a problem: traditional lenders want two years of tax returns. If you write off expenses aggressively, your qualifying income drops. Bank statement loans solve this by using your actual deposits to prove income.
This loan fits West Covina's entrepreneurial corridor along Grand Avenue and the independent operators in the commercial districts. You show 12 or 24 months of business or personal bank statements. Lenders calculate your income from average monthly deposits.
Bank Statement Loans in West Covina
Most lenders require 640 credit minimum, though some go as low as 620. Down payment starts at 10% for primary residences, 15-20% for investment properties. You need consistent deposit history showing business income, not sporadic transfers.
Lenders look at gross deposits, then apply an expense factor — typically 25-50% depending on your business type. A sole proprietor depositing $15,000 monthly might qualify on $9,000 after the haircut. Cash reserves of 6-12 months help strengthen marginal files.
Local decision guide
Use this guide to connect bank statement loans eligibility, lender expectations, and local market factors before comparing payment options in West Covina.
West Covina's small business owners and 1099 contractors face a problem: traditional lenders want two years of tax returns. If you write off expenses aggressively, your qualifying income drops. Bank statement loans solve this by using your actual deposits to prove income.
This loan fits West Covina's entrepreneurial corridor along Grand Avenue and the independent operators in the commercial districts. You show 12 or 24 months of business or personal bank statements. Lenders calculate your income from average monthly deposits.
Most lenders require 640 credit minimum, though some go as low as 620. Down payment starts at 10% for primary residences, 15-20% for investment properties. You need consistent deposit history showing business income, not sporadic transfers.
Bank statement programs vary widely. Some lenders use 12 months, others require 24. Some accept personal accounts if you run income through them, others demand business accounts only. Rate differences can hit 1.5% between aggressive and conservative lenders.
We shop across 40+ non-QM lenders who offer bank statement programs. Some specialize in lower credit tiers, others excel at complex deposit patterns or foreign national borrowers. The right lender depends on your account structure and documentation quality.
Clean up your statements before submitting. Large one-time deposits raise red flags unless you can document them as business income. Remove or explain transfers between your own accounts — lenders see those as double-counting.
If you have multiple income streams, mixing personal and business accounts works with some lenders but complicates underwriting. Start application 60 days before you need funding. Bank statement files take longer than W-2 deals because underwriters scrutinize every deposit.
1099 loans verify income through your tax forms, which means you still face the write-off penalty. Profit & Loss loans require a CPA to prepare financials. Bank statement loans skip both and go straight to your deposits.
DSCR loans work for rental properties using rent income instead of personal income. If you're buying an owner-occupied home in West Covina, bank statements are usually your best non-QM option. Rates run 1-2% higher than conventional but qualify income traditional lenders reject.
West Covina has strong concentrations of service businesses, contractors, and retail operators who benefit from bank statement programs. If you're buying near Plaza West Covina or the commercial zones, expect lenders to scrutinize business stability and deposit consistency.
Los Angeles County tax liens and judgments kill more bank statement deals than credit scores. Clear any county recorder issues before applying. Lenders also watch for cash-heavy businesses — if your deposits look too clean or rounded, underwriters assume unreported income and deny the file.
Yes, many lenders accept personal accounts if they show consistent business deposits. Mixing personal and business transactions complicates underwriting but doesn't disqualify you.
Most programs require 12 or 24 months minimum. A few lenders offer alternative documentation for shorter histories, but expect higher rates and down payment requirements.
They average deposits across the statement period. Seasonal businesses qualify fine if annual income supports the loan. Provide context for major fluctuations in your letter of explanation.
Most lenders don't require returns for income verification. Some still ask for them to check for unreported liabilities or confirm you're filing. Rates vary by borrower profile and market conditions.
Yes, but you're moving to a higher rate product. This makes sense if you need cash-out and no longer qualify conventionally due to recent income changes.