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in San Anselmo, CA
San Anselmo's self-employed buyers—consultants, contractors, practice owners—face a choice between two income verification methods. Bank statement loans use 12-24 months of deposits, while P&L loans rely on CPA-prepared financials.
Both are non-QM options built for borrowers whose tax returns don't reflect their true earnings. The right choice depends on how you run your business and what documentation you already have.
Most self-employed borrowers can qualify through either route. Your business structure and bookkeeping habits determine which path closes faster and costs less.
Bank statement loans use actual cash flow from your business or personal accounts. Lenders review 12 or 24 months of statements to calculate average monthly deposits.
This works well for cash-heavy businesses or borrowers who write off significant expenses. No need for a CPA or formal financial statements—just pull your bank records.
Approval focuses on deposit patterns and account activity. Lenders look for consistent income streams and sufficient reserves after typical business expenses.
You can use business accounts, personal accounts, or a mix. Many San Anselmo borrowers prefer this route because it's faster and doesn't require hiring an accountant.
P&L statement loans require a CPA-prepared profit and loss statement covering 12-24 months. Some lenders also want a balance sheet and may require a CPA letter certifying accuracy.
This option suits borrowers who already work with accountants and maintain detailed books. If you have QuickBooks records and file accurate tax returns, the P&L route is straightforward.
Lenders verify income using your net profit figures. The CPA's signature adds credibility, which can sometimes mean better terms than bank statement loans.
Expect more upfront work coordinating with your accountant. But if you're organized and your books are clean, this path often feels more professional and controlled.
The core difference is documentation source. Bank statement loans pull directly from deposits—what actually hit your account. P&L loans use accounting records that show business performance after proper bookkeeping.
Bank statement loans calculate income by applying an expense factor to deposits, typically 25-50% depending on business type. P&L loans use your accountant's bottom-line net profit figure.
Cost and timeline differ too. Bank statement loans close faster because you're just gathering statements. P&L loans take longer if you need to have financials prepared, and you'll pay your CPA for that work.
Credit and down payment requirements are similar for both. Expect 620-640 minimum credit scores and 10-20% down depending on the property and your profile.
Choose bank statement loans if you don't have a CPA relationship, run a cash-heavy business, or need to close quickly. This works for contractors, consultants, and small business owners who write off expenses aggressively.
Go with P&L loans if you already maintain clean books and work with an accountant. This option makes sense for established practices, incorporated businesses, and borrowers who prefer formal financial documentation.
Consider your Marin County property target too. Higher-priced homes may benefit from P&L documentation if it shows stronger income. For smaller purchases, bank statements offer the fastest path to approval.
We see both options close successfully in San Anselmo. The question isn't which is better—it's which matches how you already run your business and document your earnings.
Yes, but it restarts underwriting and delays closing. Choose your documentation path before applying to avoid timeline issues.
Both handle conforming and jumbo amounts. Your income documentation matters more than the property price for qualification.
Rates are comparable and depend more on credit, down payment, and reserves. P&L loans sometimes edge slightly lower with strong financials.
Most lenders require 12-24 months. Two years of documentation typically strengthens your application and may improve terms.
No, lenders require one income verification method. Pick the approach that shows your income most clearly and completely.
Some lenders want two years of returns for both programs, but they won't use them to calculate income. They verify business existence and check consistency.