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in West Hollywood, CA
West Hollywood's self-employed buyers—from entertainment industry freelancers to creative agency owners—rarely fit traditional income documentation. Both bank statement and P&L loans solve the same problem but through different verification methods.
Bank statement loans use deposit patterns to calculate income. P&L loans rely on CPA-prepared financials. Your choice depends on how you manage your business finances and which paper trail looks stronger.
Bank statement loans analyze 12 to 24 months of personal or business bank deposits. Underwriters calculate average monthly income from your deposits, often applying a percentage to account for business expenses.
This works well if you show consistent deposits but write off most income on tax returns. No CPA required. Lenders review statements directly and verify deposit patterns match your claimed income.
P&L statement loans require a CPA-prepared profit and loss document covering 12-24 months. Your accountant certifies the numbers. Underwriters use net profit figures to qualify your income.
This route makes sense if you already work with a CPA and your P&L shows strong profitability. The documentation looks more formal than raw bank statements, which some lenders prefer.
Bank statement loans skip the CPA entirely—you just provide statements showing regular deposits. P&L loans require professional preparation, which costs money but may yield higher qualifying income if your P&L is stronger than deposit patterns.
Rate and down payment requirements often match between the two. The real difference is which documentation path works better for your business structure and bookkeeping habits.
Choose bank statements if you don't use a CPA or show irregular deposit timing. This works for freelancers, contractors, and anyone managing finances informally but maintaining steady cash flow.
Go with P&L if you already have a CPA and clean books showing consistent profit. West Hollywood real estate agents, production company owners, and established consultants often prefer this route since their financials are already prepared quarterly.
Yes, most lenders accept business statements if they clearly show your income deposits. Some borrowers submit both to maximize qualifying income.
No, you need a CPA-prepared P&L, not a full audit. Your accountant certifies the numbers covering 12-24 months of business activity.
Rates are similar between the two since both are non-QM programs. Your credit score and down payment matter more than documentation type.
Use the P&L route. Lenders qualify you on whichever documentation shows stronger income, assuming it's properly prepared and certified.
Most programs require 12-24 months. Longer history strengthens your file, especially if income increased over time.