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in Visalia, CA
Both loan types help self-employed borrowers in Visalia qualify without W-2s. The difference is how lenders verify your income.
1099 loans use tax forms you receive from clients. Bank statement loans analyze deposits flowing through your accounts.
Your business structure and how much you write off determine which option gets you approved faster and at better terms.
1099 loans verify income using the 1099 forms you receive from clients. Lenders calculate your qualifying income from these forms.
You need consistent 1099 income over 12-24 months. Lenders average your income and may allow some business expense deductions.
This works best if you receive clear 1099 documentation and don't write off most of your income on Schedule C.
Bank statement loans use 12 or 24 months of personal or business bank statements instead of tax returns. Lenders calculate income from deposits.
Underwriters apply an expense factor, typically 25-50%, to account for business costs. Higher deposits mean stronger qualifying income.
This option works when you write off significant expenses or have complex income that doesn't show well on 1099 forms.
1099 loans rely on what clients report to the IRS. Bank statement loans look at actual cash flow through your accounts.
If you write off 60% of your income, bank statements calculate higher qualifying income than 1099 forms. That's the biggest difference.
Bank statement loans typically accept lower credit scores but charge slightly higher rates. Documentation burden is heavier with bank statements.
For Visalia borrowers with straightforward contractor income, 1099 loans close faster. Complex businesses with multiple revenue streams fit bank statement programs better.
Choose 1099 loans if you receive clear contractor income from multiple clients and don't write off more than 30% of your gross. Faster processing and lower rates.
Go with bank statement loans if you maximize tax deductions or run a business with expenses that don't reflect true cash flow. The deposit method captures income your tax returns hide.
Most Visalia self-employed borrowers qualify for both. We run the numbers both ways to see which delivers better purchasing power and terms.
No, lenders use one income verification method per loan. We choose whichever method qualifies you for better terms and higher loan amounts.
1099 loans need your full tax returns to verify the 1099 income. Bank statement loans typically don't require tax returns at all.
Bank statement loans typically run 0.25-0.50% higher than 1099 loans. Rates vary by borrower profile and market conditions.
1099 loans typically start at 620 credit. Bank statement programs go as low as 600 with some lenders.
1099 loans close in 21-30 days. Bank statement loans take 30-45 days due to detailed deposit analysis.