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in Corte Madera, CA
Self-employed borrowers in Corte Madera face a simple choice: prove income with bank statements or a CPA-prepared P&L. Both skip tax returns, but they differ in who qualifies and how lenders calculate income.
Bank statement loans work for most self-employed buyers. P&L loans appeal to business owners with clean books and an accountant relationship. The right choice depends on how your business runs and what paperwork you already have.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate income. Lenders average your monthly deposits, then apply a percentage based on your business type. Most programs use 50% of deposits for service businesses, more for retail.
You don't need a CPA or formal financial statements. This works well for contractors, consultants, real estate agents, and small business owners who write off significant expenses. Credit minimums typically start at 620, with rates varying by borrower profile and market conditions.
P&L loans require a certified public accountant to prepare a profit and loss statement for your business. Lenders use the net income shown on this statement to qualify you. Your CPA must be licensed and typically needs to have prepared at least one year of business returns for you.
This approach works best for established businesses with clean accounting. You'll need year-to-date financials plus prior year statements. The income calculation is straightforward—lenders use the bottom line profit your CPA reports. Rates vary by borrower profile and market conditions.
The core difference is documentation type. Bank statements show raw cash flow. P&L statements show profit after expenses. If you write off everything and show minimal taxable income, bank statements usually yield higher qualifying income.
CPA involvement separates these options. Bank statement loans require no accountant—just send statements directly from your bank. P&L loans demand a licensed CPA who knows your business. That adds cost but provides cleaner documentation lenders sometimes prefer for higher loan amounts.
Choose bank statement loans if you don't work with a CPA or prefer simpler documentation. This route works for newer businesses, contractors without formal books, and anyone who wants to avoid accountant fees. Most self-employed borrowers in Marin County use this option.
Pick P&L loans if you already maintain CPA-prepared financials. Business owners with established accounting relationships, corporate structures, or multiple revenue streams often find this cleaner. The formal statements can support higher loan amounts when your profit margins are strong.
No. Lenders require you to choose one income documentation method. Pick whichever shows stronger qualifying income for your situation.
It depends on your business structure. Bank statements typically work better for high-revenue, high-expense businesses. P&L works better when your net profit margins are strong.
Usually yes, starting at 10-15% down. Some lenders offer better terms for P&L loans due to CPA verification. Requirements vary by lender and credit profile.
Bank statement loans close in 21-30 days typically. P&L loans can be faster if your CPA statements are recent and complete.
Most CPAs charge $500-1500 for mortgage-specific P&L preparation. Bank statement loans avoid this cost entirely since you use existing account records.