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in Suisun City, CA
Self-employed borrowers in Suisun City face a choice between two non-QM income documentation methods. Bank statement loans pull income directly from deposit history while P&L statement loans rely on CPA-prepared financials.
Both bypass traditional tax return requirements that hurt business owners who write off aggressively. The difference comes down to how clean your bank accounts are and whether you already work with a CPA.
Bank statement loans calculate income from 12 or 24 months of business or personal bank deposits. Underwriters apply a percentage factor to your average monthly deposits to determine qualifying income.
This works best for borrowers with clean separation between business and personal accounts. Mixed deposits from multiple income sources create underwriting headaches that slow approval.
Most lenders accept either business statements alone or a combination of business and personal accounts. You need consistent deposit patterns without large one-time transfers that inflate averages.
P&L statement loans use a CPA-prepared profit and loss statement to document income. Your accountant certifies the numbers covering the most recent 12 or 24 months of business operations.
This route makes sense if you already work with a CPA who knows your business inside out. The P&L presents income in a clean format without messy bank transfers or deposits from multiple sources.
Some lenders also require a balance sheet alongside the P&L. The CPA must be licensed and cannot be a family member or business partner.
Bank statement loans show what actually hit your accounts. P&L loans show what your CPA says you earned after proper accounting treatment of expenses and revenue.
Documentation cost differs significantly. Bank statements are free from your financial institution while CPA-prepared P&Ls run $500 to $2,000 depending on business complexity.
Processing speed favors bank statements because underwriters review them directly. P&L loans add time for CPA preparation and verification of the accountant's credentials.
Income calculation varies between methods. Bank statements typically use 50-100% of deposits as qualifying income. P&L loans use the bottom-line profit number your CPA certifies.
Choose bank statement loans if your deposits are clean and consistent with minimal mixing of personal and business funds. This works for contractors, consultants, and service providers with straightforward income.
Go with P&L loans if your bank accounts are messy with transfers between accounts, loan proceeds, or irregular large deposits. Also pick this if you already have a CPA preparing financials for other purposes.
Suisun City borrowers with both options should compare actual qualifying income under each method. Run the numbers with a broker before paying for CPA preparation.
Most lenders require you to pick one income documentation method. Mixing both creates inconsistencies that complicate underwriting and slow approval.
Yes, both carry rate premiums of 1-3% over conventional loans. You pay more for flexible income documentation when tax returns don't work.
That depends entirely on your specific numbers. Some borrowers qualify for more using bank statements while others do better with P&L calculations.
Bank statement loans typically close in 21-30 days. P&L loans add 1-2 weeks for CPA preparation if you don't have recent financials ready.
Switching restarts underwriting from scratch and delays closing. Choose your documentation method carefully before submitting the application.