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in San Rafael, CA
San Rafael's self-employed professionals face a common problem: their tax returns don't show their real income. Both bank statement loans and P&L statement loans solve this, but they verify your earnings differently.
Bank statement loans analyze deposits over 12-24 months. P&L loans use a CPA-prepared financial statement. Most borrowers qualify for one but not both—the right choice depends on how your business manages cash flow.
Bank statement loans use 12 or 24 months of personal or business bank statements to calculate income. Lenders add up deposits and apply a percentage (typically 50-75%) to account for business expenses.
You don't need tax returns or a CPA. Your accountant wrote off everything to minimize taxes? That doesn't hurt you here. The lender sees actual cash flowing through your accounts, which often shows higher income than your 1040.
P&L statement loans require a CPA-prepared profit and loss statement covering at least 12 months. Your accountant signs off on your business income, and that number becomes your qualifying income.
These loans work best for established businesses with clean books. You need a licensed CPA relationship—no self-prepared statements. The P&L shows your business profitability without the confusion of deposits and transfers that complicate bank statement analysis.
The big difference: bank statement loans look at cash movement, P&L loans look at business profit. Bank statements capture everything—client payments, transfers, refunds. P&L statements show revenue minus expenses in accounting terms.
Bank statement loans take longer to underwrite because analysts review every deposit. P&L loans move faster since the CPA already organized the numbers. But P&L loans require an existing CPA relationship, which costs money if you don't have one.
Choose bank statement loans if you don't use a CPA, run multiple income streams through one account, or wrote off everything on your taxes. This works for contractors, consultants, and small business owners who keep simple books.
Choose P&L loans if you have a CPA, clean separated business finances, and want faster underwriting. Tech consultants, established retailers, and professional service providers in San Rafael typically prefer this route. Rates vary by borrower profile and market conditions.
Yes, most lenders accept either or both. Personal statements work better if you run income through your personal account.
Expect $500-2000 depending on business complexity. If you don't already use a CPA, bank statement loans cost less upfront.
Rates are similar for both—credit score and down payment matter more. Both are non-QM loans priced above conventional rates.
Bank statement loans typically require 12-24 months of statements. P&L loans need 12+ months of business operation reflected in the statement.
Bank statement lenders expect this. They calculate average monthly income and account for seasonality in your business.