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in Atwater, CA
Self-employed borrowers in Atwater face a common problem: tax returns don't show your real income. Both bank statement and P&L loans solve this by using alternative documentation to prove what you actually earn.
The choice between them comes down to how you run your books and what documentation you already have. Most self-employed borrowers qualify for one but not both, based on how they track income.
Bank statement loans analyze 12 to 24 months of personal or business bank deposits. Lenders calculate your monthly income by averaging deposits and applying an expense ratio, typically 25% to 50% depending on your industry.
You don't need a CPA or formal accounting. Just upload statements from your checking account. Contractors, real estate agents, and gig workers use these because they match how cash actually moves through self-employed businesses.
P&L statement loans require a CPA-prepared profit and loss statement covering 12 to 24 months. Your accountant must be licensed and willing to sign off on the numbers, which means your books need to be clean and current.
These work best for established businesses with formal accounting systems already in place. If you already pay a CPA to manage your books, this loan simply uses what you're already producing.
Bank statements show what actually hit your account. P&L statements show what your CPA says you earned. That difference matters because bank deposits include everything—client payments, transfers, even refunds—while P&L statements separate business income from noise.
Cost is another split. Bank statement loans cost nothing to document if you already have online banking. P&L loans cost $500 to $2,000 to prepare if you don't already work with a CPA. Rates vary by borrower profile and market conditions, but both typically price within 0.25% to 0.50% of each other.
Choose bank statements if you don't have a CPA or if hiring one would delay your purchase. Gig workers, new business owners, and anyone with straightforward deposit patterns fit here. Your income needs to be visible in regular deposits.
Choose P&L if you already have a CPA managing your books or if your bank statements look messy with lots of transfers and non-income deposits. Established businesses with clean accounting systems prefer this because it shows a cleaner income picture than raw bank data.
No. Lenders require one documentation method or the other, not both. Mixing them creates conflicting income calculations that underwriting can't reconcile.
It depends on which shows higher income. P&L statements often show more because CPAs can add back legitimate business expenses that reduce deposits in bank statements.
Yes. Both typically require 620 minimum credit, though some lenders go to 580. Higher scores unlock better rates on both programs.
Bank statement loans close in 21-30 days once you upload statements. P&L loans add 1-2 weeks if your CPA needs to prepare the statement first.
Yes, but it restarts underwriting. If your bank statements don't show enough income, having your CPA prepare a P&L can save the deal.