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in Westlake Village, CA
Westlake Village's entrepreneurial community has two main non-QM paths when traditional income documentation won't work. Both bank statement and P&L statement loans serve self-employed borrowers, but the approval process and requirements differ significantly.
Your choice between these programs depends on how you run your books and which documentation you already maintain. Most business owners qualify for one approach more easily than the other based on their existing financial structure.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate qualifying income. Lenders apply a percentage (typically 50-75%) to your average monthly deposits to determine what you can borrow.
This program works well if you show consistent deposits but write off most income on your tax returns. You don't need a CPA or formal P&L statements—just bank statements showing regular cash flow into your accounts.
Credit requirements start around 620, though stronger profiles get better pricing. Many Westlake Village consultants and contractors prefer this route because it's faster and doesn't require formal accounting.
P&L statement loans require a CPA-prepared profit and loss statement covering 12-24 months of business operations. Lenders use your net profit to determine qualifying income, similar to how traditional loans use W-2 income.
You'll need an active CPA relationship and formal bookkeeping. The statement must be signed by a licensed accountant—self-prepared financials won't work even if you're a numbers expert.
This approach makes sense if you already maintain clean books for your business and have a CPA on retainer. Many established Westlake Village business owners find this smoother because their financials are already organized for tax purposes.
The documentation gap is the biggest difference. Bank statement loans need only your actual bank records—no accountant required. P&L loans demand professional financial statements that meet CPA standards.
Income calculation works differently too. Bank statement lenders apply a percentage to deposits (accounting for business expenses). P&L lenders use your bottom-line profit after all deductions are already taken.
Processing speed varies based on documentation readiness. If your CPA maintains current P&L statements, that route moves faster. If you need to engage an accountant just for the loan, bank statements will close sooner.
Choose bank statement loans if you don't use a CPA regularly or if your tax returns show minimal income due to write-offs. This works for newer businesses, 1099 contractors, and anyone who maintains bank records but not formal books.
Go with P&L loans if you already work with a CPA and keep organized financial statements. Established businesses with clean books often get better pricing this way, and the approval process feels more familiar to traditional lending.
Neither option is inherently better—it's about matching your existing business structure. Most Westlake Village self-employed borrowers qualify under both programs but find one significantly easier based on how they already manage finances.
No, lenders require you to choose one income verification method. Mixing documentation types complicates underwriting and typically isn't allowed under program guidelines.
Pricing varies by borrower profile and market conditions, not by documentation type. Both are non-QM products with similar rate structures when credit and down payment are comparable.
Most lenders require 12 or 24 months of consecutive statements. Gaps or missing months can disqualify the file, so ensure you have complete records before applying.
Yes, the accountant must be a licensed CPA. Bookkeepers and enrolled agents don't meet underwriting requirements for most P&L statement loan programs.
Bank statement loans typically close quicker if you don't already have CPA-prepared financials. P&L loans move fast when your accountant maintains current statements.