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in San Bruno, CA
Self-employed professionals in San Bruno often face challenges qualifying for traditional mortgages. Both bank statement loans and profit & loss statement loans offer alternative income verification methods designed specifically for business owners and independent contractors.
These non-QM loan options recognize that tax returns don't always reflect your true earning power. Each approach has distinct documentation requirements and qualification criteria that can make one a better fit than the other for your situation.
Bank statement loans use 12 to 24 months of personal or business bank statements to calculate your qualifying income. Lenders typically average your monthly deposits and apply an expense factor to determine how much you can borrow.
This option works well for borrowers who maintain consistent deposit patterns and don't want to involve a CPA. The process is straightforward: provide your statements, and underwriters analyze the cash flow to verify income capacity.
Rates vary by borrower profile and market conditions. You'll generally need a credit score of 620 or higher and a down payment of at least 10% to 20%, depending on the lender and loan amount.
Profit & loss statement loans require a CPA-prepared P&L statement to document your business income. This approach provides a more formal financial picture and may strengthen your application if your business shows strong profitability on paper.
Many lenders also require a business license and may ask for additional documentation to verify your company's legitimacy. The CPA preparation adds a step to the process but can result in more favorable terms for established businesses.
This option appeals to San Bruno business owners who already work with accountants and maintain detailed financial records. Rates vary by borrower profile and market conditions, with qualification standards similar to bank statement loans.
The primary difference lies in documentation: bank statement loans analyze actual cash flow, while P&L loans rely on accountant-prepared financial statements. Bank statement loans offer faster processing since you're simply providing existing documents rather than having financials prepared.
Cost considerations differ too. Bank statement loans eliminate CPA fees, but P&L loans might offer slightly better pricing if your business shows strong margins. The choice often depends on how you manage your finances and what documentation you already maintain.
Lenders may view these options differently based on your business structure. Sole proprietors often find bank statement loans more accessible, while LLC or S-corp owners may benefit from the formal presentation a P&L provides.
Choose bank statement loans if you want a simpler process without involving a CPA, maintain regular business deposits, and can provide 12 to 24 months of clean statements. This works well for freelancers, contractors, and gig economy workers in San Bruno.
Opt for P&L statement loans if you already work with an accountant, operate a formal business entity, or your profit margins look stronger on paper than your gross deposits suggest. This option suits established San Bruno businesses with comprehensive financial records.
Both programs serve self-employed borrowers who don't qualify through traditional channels. The right choice depends on your documentation preferences, business structure, and how quickly you need to close. SRK Capital can review your specific situation and recommend the best path forward.
Yes, most lenders accept either personal or business bank statements. Business statements work well if most of your income flows through business accounts. Some borrowers use a combination of both.
CPA fees for preparing a profit and loss statement typically range from a few hundred to over a thousand dollars, depending on your business complexity. This is an upfront cost to consider when comparing options.
Rates vary by borrower profile and market conditions. Both programs typically offer similar pricing, though individual lender preferences may favor one approach over the other based on your specific financial picture.
Most lenders prefer at least two years of self-employment history, but some accept one year with strong compensating factors. The documentation period matches your business history in either program.
Yes, you can typically pivot between documentation methods if one approach isn't working. Your loan officer can help determine which option presents your income most favorably during the initial review.