Loading
in Rohnert Park, CA
Self-employed borrowers in Rohnert Park face a common problem: tax returns don't reflect real income. Both bank statement and P&L loans solve this, but they work differently.
Bank statement loans analyze deposits over 12-24 months. P&L loans rely on a CPA-prepared financial statement. Your business structure and record-keeping determine which path makes sense.
Bank statement loans skip tax returns entirely. Lenders review 12 or 24 months of business or personal bank statements to calculate qualifying income.
They average your deposits and apply an expense ratio, typically 25-50% depending on business type. What hits your account is what counts, even if you write off most of it.
This works well for contractors, consultants, and sole proprietors who run lean operations. You need consistent deposit patterns and clean bank records with minimal NSFs or overdrafts.
P&L statement loans require a CPA-prepared profit and loss statement covering one or two years. The CPA must be licensed and independent—not a family member.
Lenders use net business income from the P&L to qualify you. This captures your actual profitability without the deposit fluctuations that affect bank statement loans.
This route fits established businesses with formal accounting. If you already work with a CPA for quarterly reviews or planning, the documentation exists. Companies with multiple revenue streams or complex expenses benefit most.
The biggest split is preparation cost versus simplicity. Bank statement loans cost less upfront—just pull your statements. P&L loans require paying a CPA, which runs $500-2000 depending on business complexity.
Income calculation differs significantly. Bank statements use gross deposits minus an expense ratio. P&L loans use actual net income after all business expenses, which can be higher or lower than the bank statement method.
Approval speed varies too. Bank statement loans move faster because statements are standardized documents. P&L loans need underwriter review of your CPA's work, adding 3-5 days to initial approval.
Choose bank statement loans if you're a sole proprietor or independent contractor with straightforward income. Your deposits should be consistent and your banking clean. This works for Rohnert Park real estate agents, freelancers, and tradespeople.
Go with P&L loans if you run an LLC or S-corp with formal bookkeeping. This fits business owners who already have CPA relationships and complex expense structures that reduce bank deposits but show strong net income.
Run both scenarios before deciding. We see cases where bank statement income qualifies higher and others where P&L income wins. Your specific business model determines which calculation method yields better results.
Yes, if you run income through personal accounts as a sole proprietor. Most lenders accept either business or personal statements depending on where revenue flows.
No, any licensed CPA works. They must be independent and willing to provide their license number and sign the P&L statement.
Rates are similar for both programs since they're both non-QM loans. Your credit score and down payment affect pricing more than documentation type.
Yes, but it restarts underwriting. We recommend choosing upfront based on which income calculation method works better for your business.
Both handle mixed-use properties. The income documentation method doesn't restrict property type as long as you meet occupancy requirements.