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in Citrus Heights, CA
Self-employed borrowers in Citrus Heights have two strong Non-QM financing options. Both Bank Statement Loans and Profit & Loss Statement Loans help entrepreneurs and business owners qualify without traditional W-2 documentation.
The main difference lies in how lenders verify your income. Bank Statement Loans analyze your actual cash flow, while P&L Statement Loans rely on accountant-prepared financial documents.
Understanding which documentation method works better for your business structure can save time and improve approval odds.
Bank Statement Loans use 12 to 24 months of personal or business bank statements to calculate qualifying income. Lenders review deposits to determine your average monthly income without requiring tax returns.
This option works well for borrowers who write off significant expenses on their taxes. Your actual cash flow matters more than your taxable income on paper.
Most programs accept either personal or business bank statements. Some lenders average deposits at 50% to account for business expenses, though this varies by program.
Profit & Loss Statement Loans require a CPA-prepared P&L covering at least 12 months of business activity. Your accountant creates a detailed summary of your business income and expenses.
This approach appeals to borrowers who maintain organized financial records. The P&L must be signed and dated by a licensed CPA or tax professional.
Lenders may also request a balance sheet and year-to-date P&L. This documentation provides a comprehensive view of your business financial health.
The cost difference starts with documentation. Bank Statement Loans require only statements you already receive monthly. P&L Statement Loans need professional CPA preparation, which adds an expense.
Qualification timing also varies significantly. Bank statements are immediately available, while preparing a formal P&L can take weeks if you don't have one ready.
Income calculation methods differ too. Bank Statement programs use deposit averaging, while P&L programs rely on net profit figures from your accountant's analysis. Rates vary by borrower profile and market conditions for both options.
Choose Bank Statement Loans if you want a faster process with minimal professional fees. This works well for contractors, retail owners, and service providers who have steady deposit patterns but write off substantial expenses.
Pick P&L Statement Loans if you already work with a CPA and maintain detailed financial records. Real estate investors, medical professionals, and established business owners often prefer this route.
Your business structure matters too. Sole proprietors often find bank statements simpler, while corporations and LLCs may benefit from formal P&L documentation that shows business stability.
No, lenders require you to choose one income documentation method. Pick the option that best reflects your business income and is easiest for you to provide.
Yes, both typically require 10-20% down depending on credit score and property type. Your specific down payment depends on the lender's requirements and your overall financial profile.
Bank Statement Loans often close faster since documentation is readily available. P&L Loans may take longer if your accountant needs time to prepare current financial statements.
Rates vary by borrower profile and market conditions for both programs. Your credit score, down payment, and overall financial strength impact pricing more than the documentation type.
Neither requires tax returns as the primary income documentation. That's the main advantage of both programs for self-employed borrowers in Citrus Heights.