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in Whittier, CA
Self-employed borrowers in Whittier face a choice: use bank statements or a CPA-prepared P&L to prove income. Both are non-QM loans designed for business owners who write off most of their income.
The right path depends on how you run your books and what documentation you already have. Most borrowers pick based on which option shows stronger income without extra preparation.
Bank statement loans calculate income from business deposits over 12 or 24 months. Lenders add up deposits and take a percentage (usually 50-75%) as qualifying income.
You don't need a CPA or formal accounting. Just provide personal or business bank statements showing consistent deposits. This works well for contractors, Amazon sellers, or real estate agents with steady cash flow.
Rates typically run 1-2% above conventional loans. Most programs require 10-20% down and credit scores above 620. You can close in 3-4 weeks once statements are submitted.
P&L statement loans use a year-to-date profit and loss prepared by your CPA. The lender underwrites based on net profit shown on that statement instead of tax returns.
You need a licensed CPA to prepare and sign the P&L. This route makes sense if you already work with a CPA for quarterly filings or business planning.
Income documentation is cleaner but less flexible. If your P&L shows $10k monthly profit, that's your qualifying income. No averaging or percentage calculations like bank statements.
Bank statement loans let lenders calculate income from raw deposits. P&L loans require formal accounting from a licensed CPA. That's the core split.
Bank statements show actual cash movement. P&Ls show profit after expenses under GAAP accounting. If you write off aggressively but deposit heavily, bank statements may show higher income.
P&L loans often close faster if your CPA can turn around the statement quickly. Bank statements take longer to review but don't require third-party prep work. Rates vary by borrower profile and market conditions but run similar between both programs.
Pick bank statements if you don't use a CPA or your deposits look stronger than your net profit. This fits most contractors, gig workers, and cash-heavy businesses in Whittier.
Choose P&L if you already pay a CPA for monthly or quarterly books and your profit margins are solid. This works for established businesses with clean accounting.
Either way, you're proving income without tax returns. The question is whether bank deposits or certified profit better represents your ability to repay.
No. Lenders require you to choose one income documentation method. Pick whichever shows the stronger qualifying income for your situation.
Yes. Both typically need 10-20% down depending on credit score and loan amount. Investment properties may require 20-25% down.
P&L loans can close in 2-3 weeks if your CPA provides the statement quickly. Bank statement loans take 3-4 weeks due to deposit analysis.
Switching restarts underwriting since the income calculation changes completely. Decide before you apply to avoid delays.
Your CPA must be licensed and in good standing. They'll sign a certification stating the P&L reflects accurate business financials.
Bank statements usually win if you write off 40%+ of income but maintain strong deposits. P&L works better for businesses with tighter expense margins.