Do you work for yourself? Can you count on a seasonal salary? Do you have an unpredictable source of income because you are a consultant, publicist, tax preparer, freelancer, artist, or some other type of professional? If this sounds like you, you may want to check out our bank statement program.
How does it function, exactly?
Simple. Our loan decision is based on a mix of your bank records and a profit and loss statement rather than year-by-year tax returns, W-2s, or proof of regular payroll checks.
We can still assist you if you only work part-time but keep bank records showing a steady flow of revenue throughout the year.
Our bank statement program has three distinct outcomes.
This is how each possibility plays out:
One Possible Outcome: Your Personal and Professional Expenses Make use of a centralized account.
- The lender submits bank statements for the preceding 12 months.
- Profit and Loss (P&L) Statement provided by Borrower, prepared by a CPA or licensed tax preparer
- Profit and loss statements must accurately reflect the nature of the borrower’s business.
- Profit and loss statements will play a pivotal role in determining a borrower’s suitability.
- The borrower will furnish bank statements to back up the P&L’s revenue.
- Deposits at the bank must equal at least 5% of revenue as reported in the P&L.
- The insurer may request bank records going back as far as twenty-four months.
A second possible scenario is that you keep your business and personal finances apart.
- Income Statements are not necessary.
- In order to determine your eligibility, we will only look at your bank statements.
- Borrower submits personal bank statements for the preceding 12 consecutive months and business bank statements for the preceding 3 months (to confirm the keeping of separate accounts).
- Monthly earnings are based on a 12-month moving average of deposits.
- The insurer can ask for bank records going back another 12 months if they want to.
- A CPA’s or licensed tax preparer’s profit and loss statement may be submitted as an alternative means by which the borrower’s monthly income is calculated.
- The data presented must corroborate the requested transaction size in both scenarios 1 and 2. If there are discrepancies, you might need to provide more proof, such as tax returns.
Third Case: You Get Approved for a Loan Based Exclusively on Your Company’s Bank Statements
- The 12 most recent months’ worth of bank statements for the borrower’s business are provided.
- Profit and Loss (P&L) Statement provided by Borrower, prepared by a CPA or licensed tax preparer
- Deposits in the company’s bank account must equal at least 5% of the revenue reported in the profit and loss statement.
Non-sufficient funds (NSF) and overdrafts (OD), even with “Overdraft Protection,” may go towards the underwriter’s final decision in all three cases. There will be a cap of three NSF notices per 12-month period, regardless of how many times they were issued during any given month. The underwriting manager has the discretion to make exceptions on a case-by-case basis.
Interested in learning more about our bank statement program? Contact us now!
Call Steven Jackson at 813-616-9411 now!
