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in Imperial Beach, CA
Both loans solve the same problem: proving income when tax returns don't tell the full story. Bank statement loans pull deposits from your checking account. P&L loans use a CPA's financial report.
Imperial Beach self-employed borrowers—contractors, consultants, small business owners—lean heavily on these options. The right choice depends on how you run your books and what documentation you already have.
Bank statement loans calculate income from 12 or 24 months of business or personal bank deposits. Lenders apply a percentage—typically 50% to 75%—to account for business expenses. The rest counts as qualifying income.
You don't need a CPA or formal financials. Just PDF statements from your bank. This works well for borrowers who write off everything and show minimal taxable income but have consistent cash flow.
P&L statement loans require a CPA-prepared profit and loss report covering 12 to 24 months. The lender uses net profit from that statement to qualify you. Some programs also want a balance sheet and a CPA letter certifying the numbers.
This path suits borrowers with organized accounting who already work with a CPA. If you have QuickBooks dialed in and file detailed tax returns, a P&L loan can sometimes unlock higher income calculations than bank statements.
Bank statements are faster and simpler—no CPA needed, no waiting for year-end reports. P&L loans demand more upfront work but can yield better income calculations if your books are tight. Rates vary by borrower profile and market conditions, but both typically price higher than conventional loans.
Credit and down payment requirements run similar—expect 620 minimum credit and 10% to 20% down. The real split comes down to documentation burden versus potential qualifying power. Bank statement programs approve faster because there's less to verify.
Go bank statement if you don't use a CPA, run lean on formal books, or need to close fast. It's the default choice for most Imperial Beach self-employed buyers—especially contractors, gig workers, and service providers who deposit client payments directly.
Choose P&L if you already pay a CPA, keep detailed financials, and your net profit exceeds what bank statements would show. Also consider P&L if you have large non-income deposits that would skew a bank statement calculation—like transfers between accounts or reimbursements.
Yes, but it adds time. You'd need to order a CPA letter and P&L statement, which can take weeks depending on your accountant's workload.
Rates are typically similar between the two. Pricing depends more on credit score, down payment, and loan amount than which income documentation you choose.
No. That's the point of both programs. You may need to sign a 4506-C so the lender can verify you filed, but returns aren't used to calculate income.
Lenders average the deposits over 12 or 24 months. Big swings aren't a dealbreaker, but consistent income makes underwriting smoother.
Yes. Most programs let you combine accounts. Some borrowers blend personal and business statements to maximize qualifying income.