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in Sebastopol, CA
Self-employed borrowers in Sebastopol face a choice: prove income with bank statements or P&L documents. Both are non-QM loans designed for business owners who write off most of their income on tax returns.
The right option depends on how you run your books and what your accountant already prepares. One uses raw deposits, the other uses calculated profit.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits. Lenders calculate income by averaging monthly deposits and applying an expense factor, typically 25-50% depending on your industry.
No CPA required. You submit PDFs of your bank statements and the lender does the math. This works well if you run a cash-heavy business or don't maintain detailed P&L records.
Rates vary by borrower profile and market conditions. Expect slightly higher rates than conventional loans due to the non-QM structure, but many Sebastopol contractors and vineyard operators use this path successfully.
P&L statement loans require a CPA-prepared profit and loss statement, usually for the most recent 12 months. The lender uses your net profit figure directly as qualifying income.
You need a licensed CPA to prepare the statement. This adds cost but gives you more control over the income calculation. If your CPA already produces quarterly or annual P&Ls, this route can be cleaner.
Rates vary by borrower profile and market conditions. P&L loans often price similarly to bank statement loans, though some lenders offer better terms when a CPA vouches for the numbers.
Documentation is the main split. Bank statement loans need account statements you already have. P&L loans need a formal statement from a licensed CPA, which costs $500-$2,000 depending on complexity.
Income calculation differs completely. Bank statements use gross deposits minus an expense percentage. P&L uses your actual net profit after expenses. If you have high expenses but irregular deposits, P&L might show higher income.
Both require similar credit and down payment. Expect 620+ credit and 10-20% down for either option. Neither cares about your tax returns, which is why self-employed Sebastopol borrowers use them.
Choose bank statements if you don't work with a CPA regularly or run a cash business. Many Sebastopol service providers, consultants, and small retail operators go this route because the documentation is simpler.
Choose P&L if your accountant already prepares these statements or if your expenses are high relative to deposits. Real estate agents, vineyard managers, and tech contractors often prefer this method.
We shop both programs across 200+ lenders. Often the same borrower qualifies for different amounts under each method, so we run both scenarios and show you which gets the best approval.
Yes, most lenders accept personal bank statements if your business income flows through them. Some allow a mix of both accounts.
The CPA must hold an active license but doesn't need to be California-based. Most lenders accept any valid U.S. CPA license.
It depends on your deposit patterns and expense structure. We calculate both to see which shows stronger qualifying income for your situation.
Bank statement loans typically close in 21-30 days. P&L loans run similar timelines once the CPA delivers the statement.
Yes, if initial income calculations don't work. We sometimes pivot mid-process when one method shows better qualifying numbers than the other.