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in Benicia, CA
Self-employed borrowers in Benicia face a choice: prove income with bank statements or a CPA-prepared P&L. Both are non-QM loans designed for business owners who write off everything they legally can.
The right path depends on how you manage your books and what documentation you already have. One requires consistent deposits, the other requires formal accounting.
Bank statement loans use 12 to 24 months of personal or business bank statements to calculate income. Lenders average your deposits and apply an expense ratio, typically 25% to 50% depending on your business type.
You don't need tax returns or a CPA. If your bank statements show consistent deposits that cover the mortgage payment, you can qualify even with minimal reported taxable income.
Rates typically run 1% to 2% higher than conventional loans. Credit score minimums start around 620, and most lenders want 10% to 20% down depending on property type and loan amount.
P&L statement loans require a CPA-prepared profit and loss statement covering at least 12 months. Your accountant signs off on your business income, which becomes the qualifying number.
You still avoid tax returns, but you need a formal relationship with a licensed CPA. Lenders verify the CPA's credentials and may require additional business documentation like a balance sheet.
Rates are similar to bank statement loans, sometimes slightly better if your P&L shows strong net profit. Down payment and credit requirements mirror bank statement loan standards.
Bank statement loans work directly from your cash flow. P&L loans work from your accountant's calculation of net profit after expenses. If you don't have a CPA, bank statements are your only path.
Processing speed favors bank statements. Most borrowers already have online access to 24 months of statements. Getting a CPA-prepared P&L takes time if you don't already produce quarterly financials.
Income calculation differs significantly. Bank statement lenders apply a flat expense ratio to deposits. P&L lenders use your actual business expenses as calculated by your CPA, which can result in higher qualifying income if you run lean.
Choose bank statement loans if you don't have a CPA relationship or need to close fast. They work well for contractors, consultants, and gig workers with consistent deposit patterns but no formal books.
Choose P&L loans if you already produce quarterly financials and your net profit looks better than your deposits suggest. Retail businesses, medical practices, and established LLCs with clean accounting often qualify for more with a P&L.
For Benicia buyers, both programs work on single-family homes, townhouses, and condos. Investment properties and second homes qualify too, though down payments increase to 20% to 25% minimum.
Yes, most lenders accept either or a combination. Business accounts often show higher deposits but require proof the business is yours.
Your CPA must hold an active license in good standing. Lenders verify credentials directly, so unlicensed bookkeepers don't qualify.
Rates are nearly identical, typically 1% to 2% above conventional. Your credit score and down payment matter more than which documentation you use.
You can, but it resets underwriting timelines. Choose your documentation path before starting the application to avoid delays.
Yes, both support cash-out refinances for self-employed borrowers. Documentation requirements stay the same as purchase loans.