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in Loomis, CA
Self-employed borrowers in Loomis face a common problem: your tax returns don't show your real income. Both bank statement and P&L loans skip traditional W-2 verification, but they work differently.
Bank statement loans analyze deposits over 12-24 months. P&L loans rely on a CPA-prepared financial statement. The path you choose depends on how you run your business and what documentation you already have.
Bank statement loans use your business and personal account deposits to calculate qualifying income. Lenders review 12 or 24 months of statements and apply a percentage to average monthly deposits.
This works well if you write off most of your income but maintain consistent deposits. You don't need a CPA or formal financial statements. Most programs accept both business and personal accounts, or a combination of both.
Expect rates 1-2% higher than conventional loans. Credit requirements typically start at 620, though 680+ gets better pricing. Down payments usually range from 10-20% depending on loan amount and property type.
P&L statement loans require a certified public accountant to prepare your profit and loss statement. This document shows business revenue minus expenses over a 12-24 month period.
The advantage: a clean P&L often qualifies you for higher loan amounts than bank statements. Lenders see professional documentation and treat it more favorably. You'll still avoid the tax return problem that hurts most self-employed borrowers.
The catch: you need an established relationship with a CPA willing to certify your financials. Many borrowers don't have this already set up. Rates run similar to bank statement loans, and down payment requirements match at 10-20%.
The core difference is documentation source. Bank statements come from your accounts. P&L statements require a CPA to compile and certify. Both avoid tax returns, but lenders view them through different lenses.
Bank statement loans offer faster setup because you already have the documents. P&L loans take longer if you need to establish a CPA relationship first. However, P&L documentation typically yields higher qualifying income for the same revenue.
Cost-wise, both carry similar interest rates and down payment requirements. The real question: do you have 12-24 months of clean bank statements ready, or do you work with a CPA who can prepare certified financials?
Choose bank statement loans if you need to close quickly and maintain organized accounts. This works well for contractors, real estate agents, and small business owners who run most transactions through checking accounts.
Pick P&L loans if you already work with a CPA for your business and want maximum purchasing power. This fits established businesses with complex revenue streams or multiple income sources that need professional documentation.
For Loomis buyers, both options work equally well for homes in the foothills. The local market doesn't favor one over the other. Your business structure and existing documentation matter more than loan type.
No. Lenders require one income verification method per loan. You pick either bank statements or P&L documentation, not both for the same application.
P&L loans typically qualify for more because CPAs present net income more favorably. Bank statement programs apply a flat percentage to deposits which often results in lower qualifying income.
Most programs accept 12 months minimum. Using 24 months of bank statements or P&L data often improves your rate and loan amount approval.
Yes, but it restarts underwriting. Switching documentation types adds 2-3 weeks to your timeline while the lender re-evaluates your file completely.
Both require similar credit scores starting at 620. P&L loans sometimes allow slightly lower scores because the documentation is more formal and CPA-verified.