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in Tulare, CA
Self-employed borrowers in Tulare face a choice between two income documentation paths. Bank statement loans pull deposits from 12-24 months of statements while P&L loans require CPA-prepared financials.
Both are non-QM products designed for business owners who can't show traditional W-2 income. Your documentation choice affects approval speed, cost, and which lender gives you the best rate.
Bank statement loans use deposits to calculate income. Lenders average your monthly deposits across 12 or 24 months and apply an expense factor of 25-50% depending on business type.
You submit personal or business bank statements directly to underwriting. No CPA required, no tax return review. This works well if your bank deposits show strong consistent income but your tax returns look lean.
Expect 10-20% down minimum. Rates run 1-2% higher than conventional loans. Credit scores above 680 get the best pricing, though some lenders approve at 620.
P&L statement loans require a CPA-prepared profit and loss statement covering at least 12 months. Your accountant signs off on business income and expenses using their license.
Underwriters use the net income from your P&L to qualify you. This method often produces higher qualifying income than bank statements if your business has low overhead or strong margins.
Down payment starts at 10-20%. Rates are comparable to bank statement loans, sometimes slightly better with a strong CPA relationship and clean financials. Credit minimums are similar at 620-680.
Bank statement loans cost less upfront since you skip the CPA expense. P&L loans add $500-2000 in accounting fees but may qualify you for more loan amount if your net profit looks strong.
Income calculation is the main split. Bank statements use gross deposits minus expenses. P&L uses net profit after all business deductions. Agriculture businesses in Tulare often prefer bank statements since deposits show strong seasonal income.
Approval speed differs too. Bank statement loans close in 3-4 weeks once you upload statements. P&L loans need time for your CPA to prepare financials, adding 1-2 weeks to the timeline.
Choose bank statement loans if you write off heavy expenses, keep minimal books, or need fast approval. This works for contractors, small operators, and anyone whose deposits tell a better story than their P&L.
Choose P&L loans if you maintain clean accounting records and strong net margins. Service businesses, consultants, and established companies with formal bookkeeping often qualify for more this way.
Tulare agricultural borrowers usually lean toward bank statements. Harvest season deposits look strong even if year-end tax returns show minimal profit after equipment purchases and operating expenses.
Yes. Most lenders accept either or both. Business accounts work better for clear income separation, but personal accounts qualify if deposits show consistent business income flow.
Yes. The CPA must hold an active California license. Enrolled agents and unlicensed bookkeepers don't meet lender requirements for P&L statement loans.
Rates are nearly identical. Both are non-QM products priced 1-2% above conventional loans based on credit score, down payment, and loan amount.
Yes, but it restarts underwriting. Have your CPA prepare the P&L before applying if you think that route will show stronger income.
Not necessarily. Lenders average the months either way. Use 24 months if recent deposits are lower to smooth out income volatility.