Loading
in Dinuba, CA
Most Dinuba self-employed borrowers hit a wall with traditional mortgages because tax write-offs crush their qualifying income. Both bank statement and P&L loans solve this problem, but they verify income differently.
Bank statement loans pull income from deposit patterns over 12-24 months. P&L loans rely on a CPA-prepared statement showing your business profit. Your choice depends on how you run your books and what documentation you already have.
Bank statement loans use your actual deposits to calculate income. Lenders review 12 or 24 months of business or personal bank statements. They apply an expense factor (typically 25-50%) then use the remainder as qualifying income.
This works well for cash-heavy businesses or borrowers who don't use a CPA. You avoid tax return income limitations. Many Dinuba ag service contractors and retail shop owners use this path because their deposits tell a clear income story.
P&L statement loans require a CPA-prepared profit and loss statement covering 12-24 months. The lender uses your bottom-line profit as qualifying income. You also need a balance sheet and a CPA letter certifying the documents.
This route makes sense if you already work with a CPA and have clean books. It typically shows higher qualifying income than bank statements because there's no blanket expense factor. Dinuba business owners with organized accounting prefer this approach.
Bank statement loans are faster to document. You pull statements from your online banking and send them over. P&L loans require engaging a CPA if you don't already have one, which adds time and cost (typically $500-1500 for the prep work).
Income calculation differs significantly. Bank statements apply an arbitrary expense factor that might understate your actual profit. P&L shows real business expenses, often yielding higher qualifying income. But P&L loans are stricter about documentation quality and CPA credentials.
Choose bank statements if you don't use a CPA or if your business runs on cash with minimal formal accounting. This works for most small Dinuba businesses under $500K in annual revenue. You'll qualify faster and avoid CPA fees.
Choose P&L if you already have a CPA and organized books. The income calculation will likely be higher, especially if your actual expenses are lower than the standard bank statement deduction. This path works better for established businesses with clean financials.
No, lenders require you to choose one income documentation method. You can't mix bank statement and P&L verification on the same application.
Yes, the CPA must hold an active state license. Lenders verify credentials and may reject documents from unlicensed tax preparers or bookkeepers.
Rates are similar since both are non-QM loans. Your credit score and down payment matter more than which income verification method you use.
Most lenders require 12 or 24 months. Using 24 months sometimes improves your qualifying income by showing a longer track record.
Lenders average deposits over the full period. Seasonal businesses work fine as long as the average supports your loan amount.