Loading
in Mount Shasta, CA
Self-employed borrowers in Mount Shasta face a basic choice: prove income with bank statements or a CPA-prepared P&L. Both are non-QM loans that skip traditional tax returns, but they differ in cost, speed, and what lenders accept.
Most business owners here—from tourism operators to contractors—choose bank statement loans for simplicity. P&L loans work better if your deposits don't reflect actual income or you have a brand-new CPA relationship to leverage.
Bank statement loans use 12 or 24 months of business or personal bank deposits to calculate income. Lenders average your deposits, apply a 50% expense ratio unless you're in a low-overhead industry, then qualify you on the net.
Most Mount Shasta self-employed borrowers prefer this route because it's straightforward. You send bank PDFs, the underwriter does the math, and you close. No CPA letter required, no reconciling discrepancies between financial statements and reality.
Rates run 1-2% above conventional loans. You need 10-20% down depending on credit score and property type. Approval takes 3-4 weeks once you submit clean statements.
P&L statement loans require a CPA-prepared profit and loss covering 1-2 years of business operations. The lender qualifies you on the net income shown, sometimes with add-backs for depreciation and one-time expenses.
This path makes sense if your bank deposits look erratic—seasonal tourism income, large client reimbursements, or business-to-business transfers that inflate deposit totals. A P&L isolates actual profit from cash flow noise.
Expect rates 1.5-2.5% above conventional, slightly higher than bank statement loans. Down payment requirements match: 10-20% based on credit and risk factors. The CPA relationship adds cost and time but solves specific documentation problems.
The core split is documentation versus cost. Bank statement loans are cheaper and faster because raw deposits tell a clear story. P&L loans cost more but let you explain income that doesn't show up cleanly in account activity.
Rate difference typically runs 0.5% in favor of bank statements. Lender overlays matter too—most have bank statement programs, fewer accept P&L docs. That competition keeps bank statement pricing sharper.
Speed favors bank statements by 1-2 weeks. You control the timeline because you generate the docs yourself. P&L loans depend on your CPA's workload and how quickly they respond to underwriter questions.
Choose bank statement loans if your deposits reflect steady business income. Tourism guides, contractors, and retail owners with predictable monthly flow fit this profile. You'll save money and close faster.
Go with P&L loans if deposits mislead lenders—big reimbursements, partner distributions, or seasonal spikes that don't represent sustainable income. The CPA letter clarifies what's real profit versus cash movement.
Most Mount Shasta self-employed borrowers start with bank statements. If underwriting flags inconsistencies, we pivot to P&L as backup. It's rare to need both, but having the option matters when deposits tell the wrong story.
Yes, if you're a sole proprietor depositing business income into personal accounts. Lenders need to see consistent income patterns regardless of account type.
No. A CPA-prepared P&L is sufficient—most lenders don't require a formal audit. The CPA signs off that the statement reflects your books.
Both require 10-20% down based on credit score and property. The documentation method doesn't change minimum equity requirements.
Yes. If underwriting rejects bank statement income calculations, you can provide CPA-prepared P&L as alternative documentation before the file dies.
Bank statement loans need 12-24 months of deposits. P&L loans typically require 1-2 years of business operation documented by the CPA.