Loading
in Truckee, CA
Truckee's self-employed borrowers—ski instructors, contractors, vacation rental owners—need alternatives to W-2 income verification. Both bank statement and P&L loans skip tax returns, but they verify income differently.
Your choice comes down to how your income flows. Seasonal businesses and cash-heavy operations lean one way. Established firms with clean accounting lean another.
Bank statement loans calculate income from 12 or 24 months of business deposits. Lenders apply an expense ratio—typically 50% for most businesses—to estimate your qualifying income.
You need consistent deposits, not perfect accounting. Personal or business statements work. Most lenders want 10-20% down and 660+ credit for mountain resort properties.
This works well for cash-heavy businesses or newer operations without formal books. If money hits your account regularly, you can qualify.
P&L loans require a CPA-prepared profit and loss statement covering 12-24 months. Your accountant signs off on the income figure, which lenders use for qualification.
You'll still need bank statements to verify the business exists and deposits align with reported revenue. Credit and down payment requirements mirror bank statement loans—10-20% down, 660+ score minimum.
This suits established businesses with formal bookkeeping. If you already work with a CPA for tax planning, documentation is straightforward.
The core split is documentation. Bank statements show raw cash flow—what actually hit your account. P&L statements show net profit after expenses, prepared by a professional.
Bank statement loans let lenders apply standard expense ratios. P&L loans use your accountant's expense calculations. If your actual expenses run higher than 50%, P&L might show stronger income.
Rates are similar—both are non-QM products priced 1-2% above conventional. But fewer lenders offer P&L programs, so your rate options may be limited.
Choose bank statements if you're newer in business, operate cash-heavy, or don't work with a CPA. This path is faster and needs less professional prep.
Go P&L if you already maintain formal books and your expenses run high. Construction businesses, rental property owners with significant deductions, and service companies with equipment costs often qualify better this way.
Truckee's seasonal economy matters here. If your income spikes in winter and drops in summer, 24-month bank statements smooth that out. P&L can show annual profitability despite monthly swings.
Yes, if business income deposits into personal accounts. Lenders accept personal statements for sole proprietors and single-member LLCs.
Your CPA must be licensed and in good standing. Most lenders verify the CPA's license number and require their signature on the statement.
Bank statement loans typically close in 21-30 days. P&L loans add time if your CPA needs to prepare statements from scratch.
Yes, but you'll restart documentation. Some brokers submit both initially to see which yields better terms.
Both accept rental income. Bank statements show actual deposits. P&L requires your accountant to document rental revenue and expenses.