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in La Mesa, CA
Self-employed borrowers in La Mesa face a choice between two main income verification methods. Bank statement loans analyze deposits from 12-24 months of statements, while P&L loans use a CPA-prepared profit and loss report.
Both options get you qualified without tax returns showing full income. The right choice depends on how your business runs and what documentation you already have.
Bank statement loans pull income directly from 12 or 24 months of business or personal bank statements. Lenders apply a percentage (typically 50-75%) to your average monthly deposits to calculate qualifying income.
This works best for cash-heavy businesses or borrowers who reinvest profits rather than showing high taxable income. You need consistent deposits and clean banking history, but no CPA involvement required.
P&L statement loans require a certified accountant to prepare a detailed profit and loss report for your business. The CPA verifies income, expenses, and net profit, which lenders use for qualification.
This option gives you more control over how income appears and can show higher qualifying numbers than bank deposits alone. Works well if you already work with a CPA or have complex business financials.
Bank statement loans require no accountant and process faster since lenders just review deposits. P&L loans need CPA involvement, adding cost and time but offering more precise income documentation.
Rate and down payment differ too. Bank statement programs typically need 10-20% down with rates 1-2% above conventional. P&L loans often require 15-25% down with similar rate premiums. Rates vary by borrower profile and market conditions.
Choose bank statement loans if you want speed and have consistent deposits showing clearly in your accounts. Skip the CPA fee and let your banking activity speak for itself.
Go with P&L loans if you already use a CPA, have complex deductions, or need to show income that doesn't flow through one clean deposit stream. The extra documentation gives lenders a clearer picture when bank statements alone look messy.
Either works for bank statement loans. Personal statements work fine for sole proprietors, while LLCs and corporations typically use business accounts.
Expect $300-$800 depending on business complexity. Some CPAs charge more for rush jobs if you need it within two weeks.
Depends on your situation. Bank statements might show higher income if you have large deposits. P&L can work better if you have major deductions reducing your deposits.
Most lenders want two years self-employment history for either option. Some accept one year with strong income and reserves.
Yes, but it restarts your timeline. Better to choose upfront based on which documents you can provide fastest.