Loan Options
Bank Statement Loan
CALIFORNIA BANK STATEMENT LOANS FOR SELF-EMPLOYED BORROWERS Qualify for your mortgage using your actual revenue and cash flow—not your tax returns.
How California Bank Statement Mortgages Replace Tax Returns
Standard conforming guidelines (Fannie Mae & Freddie Mac) evaluate your borrowing power using the bottom line on your tax returns. If you are an entrepreneur, business owner, consultant, or independent contractor, legitimate tax write-offs can drastically reduce your net taxable income—making you look unqualified on paper even when your revenue is strong.
At Secured Lending Group, our California Bank Statement Mortgage Program bypasses tax returns entirely. We evaluate 12 to 24 months of personal or business bank deposits to calculate your true purchasing capacity.
Who benefits most from this program?
Key Benefits
Business Owners & Corporate Officers: Retain your company’s full tax write-offs without sacrificing personal home buying power.
1099 Independent Contractors & Consultants: Steady revenue without the need to show 2 years of filed tax transcripts.
Real Estate Agents & Mortgage Professionals: Commission-based income with seasonal fluctuations averaged over 12–24 months.
Gig Economy Workers & Content Creators: Multiple incoming revenue streams and payment processor receipts (Stripe, PayPal, Square).
High-Net-Worth Investors: Transition equity into new residential acquisitions without liquidating investments.
HOW INCOME IS CALCULATED ON A BANK STATEMENT LOAN
One of the biggest questions self-employed borrowers have is how lenders turn raw bank statements into an approved monthly income figure. We use two clear qualification paths:
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Personal Bank Statements (100% Eligible Deposit Credit)
If you transfer your earnings or take ownership draws into a personal account:
• We collect 12 to 24 consecutive months of personal checking or savings statements.
• 100% of regular, verifiable incoming deposits are totaled and divided by 12 or 24 to establish your gross monthly qualifying income.
• Excluded items: Internal transfers between your own accounts, refunds, reversals, and irregular one-time non-revenue deposits.
• Requirement: You must provide proof of an active business checking account to verify business operating expenses do not flow through your personal account. -
Business Bank Statements (Net Cash Flow Underwriting)
If your operating revenue flows directly through your company checking account, underwriters determine your qualifying income using one of three transparent methods:
• Method A (Standard 50% Expense Factor): In the absence of third-party documentation, underwriters apply a default 50% expense ratio. If your business deposits average $40,000/month, $20,000/month is counted as qualifying income.
• Method B (CPA / Tax Preparer Letter): If your business model runs on low overhead (e.g., consulting, tech services, digital media, law), a signed letter from your CPA stating your actual historical expense ratio (e.g., 20%–30%) allows you to qualify on 70% to 80% of total deposits.
• Method C (Third-Party P&L Review): A CPA- or Enrolled Agent-prepared Profit & Loss statement covering the past 12–24 months, verified against 2 months of matching bank deposits.
PERSONAL VS. BUSINESS STATEMENTS: WHICH SHOULD YOU CHOOSE?
• Target Borrower:
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Personal: 1099 contractors, freelancers, sole proprietors
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Business: LLCs, S-Corps, C-Corps, Partnerships • Deposit Recognition:
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Personal: Up to 100% of qualifying deposits
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Business: Deposits factored against business overhead • Expense Deductions:
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Personal: None applied to personal statements
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Business: 15%–50% expense ratio depending on business type • Entity Documents:
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Personal: Business license, Articles of Organization, or DBA
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Business: Operating agreement, CPA letter, proof of 25%+ ownership
BANK STATEMENT LOANS VS. CONVENTIONAL LOANS
• Income Verification:
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Conventional: W-2s, 1040 Tax Returns, 4506-C Transcripts
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Bank Statement: 12 or 24 Months Bank Statements • Impact of Tax Write-Offs:
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Conventional: Reduces borrowing limit directly
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Bank Statement: Does not penalize write-offs or depreciation • Maximum Conforming Limit:
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Conventional: Subject to FHFA county loan caps
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Bank Statement: Exceeds county limits (Jumbo up to $4M+) • Underwriting Speed:
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Conventional: Strict automated underwriting (DU/LP)
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Bank Statement: Manual cash-flow analysis by non-QM specialists • Private Mortgage Insurance (PMI):
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Conventional: Required with less than 20% down
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Bank Statement: No PMI required on most programs
HOW THE APPLICATION PROCESS WORKS
- Complimentary Scenario Review: Submit your 12 to 24 months of PDF statements securely.
- Cash Flow & Income Analysis: Our team calculates your verified qualifying income and maximum purchase budget within 24 to 48 hours.
- Firm Pre-Approval Letter: Receive an underwriter-backed pre-approval letter ready to make offers on California real estate.
- Appraisal & Funding: We order your appraisal and close on your schedule—typically within 21 to 30 days.
FREQUENTLY ASKED QUESTIONS
Because bank statement loans are Non-QM products not backed by Fannie Mae or Freddie Mac, rates are typically 0.5% to 1.5% higher than traditional conventional conforming loans. However, they allow self-employed buyers to purchase properties that conventional underwriting would decline.
Yes. If you operate multiple business entities or transfer earnings between accounts, underwriters evaluate your combined statements to eliminate internal transfers while maximizing qualifying income.
Yes. You can use bank statement verification for Rate-and-Term Refinancing to lower your interest rate or Cash-Out Refinancing up to 80%–85% Loan-to-Value (LTV) to fund business investments, consolidate debt, or purchase additional real estate.
Yes. First-time homebuyers with at least two years of verifiable self-employment and qualifying credit scores can use this program.
Our bank statement programs begin at a 620 FICO score. Borrowers with credit scores of 680 to 720+ unlock the most competitive interest rates and access lower down payment options (down to 10% down).
Yes. Secured Lending Group originates bank statement mortgages across every California county, including San Diego, Orange County, Los Angeles, Riverside, San Bernardino, and the San Francisco Bay Area.
At a glance
Minimum Credit Score:
620 FICO
Minimum Down Payment:
10% Down (Up to 90% LTV with no monthly private mortgage insurance / PMI)
Maximum Loan Amount:
Up to $4,000,000+ (Supports jumbo & luxury properties across California)
Eligible Property Types:
Single-Family Homes (SFR), PUDs, Townhomes, Warrantable & Non-Warrantable Condos, 2–4 Unit Multi-Family
Ownership Tenure:
Minimum 2 years self-employed in the same line of business (1-year history considered with prior relevant industry track record)
See what you qualify for
Pre-approval takes about ten minutes online and comes back within a day. No cost, no obligation, no effect on your credit score to find out.