Bank Statement loans.
Qualify on deposits, not tax returns.
Business deductions can leave a self-employed borrower's taxable income below their cash flow. If that makes traditional income qualification difficult, a Bank Statement loan may offer another way to document income through eligible deposits and business expenses.
How qualifying works
Underwriters may review 12 or 24 months of personal or business statements, depending on the program. Income review may use these methods:
- Deposits method: total eligible deposits, apply expense treatment for the program and account type, and divide by the months reviewed. Exclude duplicate and ineligible deposits; some business-to-personal transfers may qualify. Adjust for ownership as required. Do not deduct expenses again if the accepted deposits already reflect them.
- Example: $240,000 in eligible business deposits over 12 months, with a 50% expense deduction and 100% ownership, gives $10,000 monthly income before any other lender adjustments ($240,000 × 50% ÷ 12). This illustrates the math, not an approval or a universal expense ratio.
- P&L method: where allowed, a CPA-prepared profit-and-loss statement is checked against deposits. The lender determines the acceptable documentation and expense treatment; personal and business accounts may be treated differently.
Who it's built for
We check self-employment history, ownership, credit, down payment, reserves, and debt-to-income ratio using the income the lender accepts. Minimum requirements and pricing vary by program and file.
Eligible structures include sole proprietors, 1099 contractors, single-member LLCs, S-Corp and C-Corp owners (with documents appropriate to the entity type), and partnerships. We determine which analysis method fits your structure before anything goes to a lender.
What it costs
Bank Statement loans may cost more than Conventional financing. Compare current rates, points, fees, and the payment you can afford today. Home values can rise or fall. A later Conventional refinance depends on your income, credit, equity, and the programs available then; it is not guaranteed.
Two pitfalls to avoid
Mixing personal and business accounts makes it hard for an underwriter to separate household spending from business expenses — keep them separate for at least the 12–24 month qualifying window.
Changing income can require additional review or adjustments. Waiting is not always better. We first check what your current documents support.
Want the deep dive? Read the full Bank Statement loan guide.
FAQ
Common questions.
Do I need tax returns at all?
These programs use eligible bank deposits to document income. Tax returns, ownership records, or other documents may still be required, depending on the lender and your file. Low taxable income alone does not determine eligibility.
Personal or business bank statements?
Either may work, depending on the program. Personal and business accounts can have different expense treatment. The lender checks eligible deposits and avoids counting the same income twice.
How long do I need to be self-employed?
Required self-employment history varies by program. We review your business history and current documents against the lender requirements before estimating qualifying income.
How much more expensive is it than a Conventional loan?
The difference depends on current lender pricing and your file. Compare rates and fees for the same scenario. A future Conventional refinance may be possible if you meet the requirements then, but should not be assumed when choosing today's loan.
How fast can Closewiser tell me what I qualify for?
We first confirm the statement period and supporting documents your program requires. Estimated qualifying income and timing depend on complete documents and lender review.
See what you qualify for.
Three minutes, no credit pull, no commitment. We respond the same business day — in English or Korean.