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in Mill Valley, CA
Mill Valley's self-employed professionals—from Tam Valley tech consultants to design studio owners—face a choice when traditional W-2 income docs won't work. Both bank statement and P&L loans get you approved without tax returns, but they verify income differently.
Bank statement loans pull your income directly from deposits. P&L loans rely on a CPA-prepared financial statement. The path you choose affects how quickly you close and what rate you pay.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits to calculate income. Lenders average your monthly deposits and apply that figure to qualify you. No CPA required—just provide statements from your bank.
Most lenders accept personal accounts, business accounts, or both. They look past irregular deposits and seasonal fluctuations to find your average monthly cash flow. Expect rates 1-2% above conventional, with LTVs up to 90% in some cases.
P&L statement loans use a year-to-date or 12-month profit and loss statement prepared by a licensed CPA. The net income shown on that P&L becomes your qualifying income. This works well if you already have a CPA relationship and updated financials.
You'll need a CPA letter confirming they prepared the statement and your business is ongoing. Some lenders also want a business license or proof of self-employment for two years. Rates and LTV terms mirror bank statement programs.
The big split is documentation speed versus control. Bank statements are faster—you download them and submit. P&L loans require a CPA to prepare financials, which adds time and cost if you don't already have current statements ready.
Bank statement programs calculate income as a percentage of deposits, usually 50-75% depending on business type. P&L loans use the exact net income your CPA reports. If your P&L shows strong profit margins, you might qualify for more with a P&L loan than with bank statements.
Choose bank statements if you want speed and don't have updated financials. This works for Mill Valley freelancers, contractors, or small business owners who manage their own books. You skip the CPA expense and get to closing faster.
Go with a P&L loan if you already work with a CPA and have clean, current financials. This route makes sense for established businesses with formal accounting—think local retail owners or professional service firms in downtown Mill Valley who maintain quarterly P&Ls anyway.
Some lenders allow hybrid documentation, but most require you to pick one income verification method. Mixing both can slow underwriting without improving your approval odds.
Yes. Bank statement loans average deposits over 12-24 months, smoothing seasonal swings. P&L loans reflect year-to-date or annualized income, which also accommodates seasonal businesses.
Rates are similar across both programs. Your credit score, down payment, and property type affect pricing more than whether you submit bank statements or a P&L.
Expect $500-$1,500 depending on business complexity. If you don't already have a CPA, bank statement loans save this cost.
Bank statement loans sometimes accept 12 months of deposits if you have strong reserves. P&L loans typically require two years of self-employment history documented by the CPA.