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in Mountain House, CA
Self-employed buyers in Mountain House face a simple choice: prove income with bank statements or a CPA-prepared P&L. Both are non-QM loans designed for business owners who can't provide W-2s.
The difference comes down to how you run your books and what documentation you already have. One option uses deposits to calculate income, the other uses formal accounting statements.
Most tech contractors and gig workers in the Tracy area choose bank statement loans because they're faster. Established business owners with clean accounting often prefer P&L loans for better pricing.
Bank statement loans use 12 or 24 months of business or personal bank statements to verify income. Lenders calculate average monthly deposits, subtract standard business expense percentages, and arrive at qualifying income.
You don't need tax returns or formal accounting. If money flows through your accounts regularly, you can qualify. This works well for contractors, consultants, and anyone who writes off significant expenses.
The process is straightforward: upload statements, lender analyzes deposits, underwriting approves based on calculated income. Most borrowers close in 30 days with 12-month statements or 24-month for stronger qualification.
P&L statement loans require a CPA-prepared profit and loss statement, typically covering 12 to 24 months. The P&L shows revenue minus expenses, giving lenders a clear income figure that's been verified by a licensed accountant.
This option appeals to established businesses with formal accounting systems already in place. If you have a CPA doing your books quarterly or annually, you're halfway there.
Underwriting treats the CPA-prepared P&L like a W-2 verification. Income is calculated from net profit, not gross deposits. This often results in cleaner qualification and sometimes better rates than bank statement programs.
Bank statement loans look at what hits your account. P&L loans look at what your CPA says you earned. The first is raw data, the second is analyzed accounting.
Cost matters: bank statement loans don't require a CPA, saving you $500-$2000 in preparation fees. But P&L loans sometimes price better because the income verification is more reliable from a lender's perspective.
Timeline differs too. Bank statements can be pulled immediately and analyzed in days. A CPA-prepared P&L takes 1-3 weeks if you don't already have one current.
For Mountain House buyers juggling multiple income sources or heavy business expenses, bank statements usually calculate higher qualifying income. For businesses with clean books and steady profit margins, P&L loans often win.
Choose bank statements if you don't work with a CPA regularly, have fluctuating income, or need to close quickly. This covers most freelancers, contractors, and small business owners in the Mountain House area.
Choose P&L if you maintain formal accounting, have a CPA relationship, and want the cleanest possible underwriting. This works for established businesses with predictable profit margins.
Neither is inherently better—it depends on how you run your business. We see tech contractors choose bank statements weekly. Established service businesses choose P&L when they already have the documentation.
The real question: which documentation do you already have or can get quickly? Start there and we'll structure the loan around your existing business setup.
Yes, if business income deposits into personal accounts. Lenders analyze deposits the same way regardless of account type.
No, just the CPA-prepared P&L statement. Tax returns aren't needed for income verification with this program.
Depends on your expense structure. Bank statements often qualify higher for businesses with heavy write-offs.
Typically $500-$2000 depending on complexity. Skip this cost entirely with bank statement loans.
Yes, we can pivot if one approach calculates better income. We'll test both before choosing.