Bank Statement Loans
Qualify on 12 or 24 months of deposits instead of tax returns — for business owners whose write-offs shrink their taxable income.
Built for business owners, sole proprietors, and 1099 earners whose tax returns understate real cash flow after write-offs.
You're a contractor, agency owner, or consultant who does everything a good business owner is supposed to do: you write off equipment, mileage, home office, health insurance, and every legitimate expense your CPA can find. It keeps your tax bill down — but it also means the adjusted gross income on your returns looks like a fraction of what actually lands in your account each month. When you apply for a conventional mortgage, the underwriter uses that shrunken number, and suddenly the bank says you can't afford a house you comfortably pay for in cash flow.
A bank statement loan solves that mismatch. Instead of tax returns and a 4506-C transcript, the lender looks at the deposits into your bank account over the last 12 or 24 months and uses those to establish your qualifying income. Your money is your proof. For a huge share of self-employed borrowers, that single change is the difference between a decline and an approval.
July 2026 Update
July 2026 update: 12-month and 24-month bank statement programs remain widely available across our non-QM investor set, and both personal and business account structures are eligible. Interest-only options and ARM structures continue to be offered alongside 30-year fixed terms on qualifying files.
Documentation expectations have tightened modestly industry-wide: most investors want consecutive, un-doctored statements (all pages, including blanks) and a clear business narrative — a CPA letter or business license that ties the deposits to your work. Coming in organized shortens underwriting materially. Program availability and guidelines are subject to change without notice.
Program at a glance
The real guideline parameters for this program. Guidelines subject to change without notice.
How qualifying works
How bank statement income is actually calculated
The lender adds up your deposits over the statement period you choose — 12 or 24 months — and averages them to a monthly figure. But not every dollar that hits your account counts as income, and the way expenses are handled depends on which account you use.
If you qualify on BUSINESS bank statements, the underwriter cannot treat 100% of your deposits as personal income, because a business has costs. So they apply an expense factor — commonly around 50% — which means roughly half of your deposits are treated as business overhead and the other half as your qualifying income. Some investors will use a lower expense factor if your CPA provides a letter stating your actual expense ratio (for example, a service business with few costs might document 20–30%), which raises your qualifying income.
If you qualify on PERSONAL bank statements, there is generally a 0% expense factor — the deposits are treated as income you have already paid yourself — but the lender will scrutinize the source of those deposits and typically wants to see that the money originates from your business.
Why your deposits don’t all count
This is the part borrowers are surprised by, so it is worth being blunt: the number the lender uses will almost always be lower than the total you see deposited. Beyond the expense factor, underwriters strip out deposits that aren't recurring business income — transfers between your own accounts, loan proceeds, one-time asset sales, tax refunds, and large unexplained lump sums all get excluded so they don't inflate the picture.
The practical takeaway: keep your business income flowing through one clean account, avoid commingling personal transfers into that account, and be ready to explain any deposit larger than your typical monthly average. Borrowers who run tidy books qualify for more, because less of their money gets discounted.
12 months vs. 24 months — which to use
A 12-month program looks at your most recent year of deposits, which helps if your business has grown recently or had a slow stretch two years ago. A 24-month program averages a longer window, which can smooth out a strong recent year but also protect you if last year dipped. We look at both when we structure your file and use whichever presents your income most accurately and favorably.
What you bring to the table
Plan on providing consecutive bank statements (every page), evidence you have been self-employed — commonly two years, though some investors allow shorter with compensating factors — and something that documents your business exists, such as a business license, CPA letter, or operating agreement. Because this is a full ability-to-repay loan, the underwriter still verifies assets for down payment and reserves and pulls credit.
Bank Statement Loans vs. a conventional loan
The clearest way to see the value of a bank statement loan is to line it up against the conventional loan a self-employed borrower usually gets steered toward first.
| Feature | Bank Statement Loans | Conventional loan |
|---|---|---|
| Income proof | 12 or 24 months of bank deposits | Two years of tax returns + 4506-C transcript |
| Effect of write-offs | Judged on deposits, not taxable income | Write-offs lower your qualifying income |
| Minimum FICO | 640+ | Typically 620+, but stricter income math |
| Occupancy | Primary, second home, or investment | Primary, second, or investment |
| Loan amounts | Up to $5M with tiered LTV | Conforming / high-balance limits |
Compare with related programs
If most of your income arrives on 1099s rather than through a business operating account, qualifying directly off your 1099s can be cleaner than parsing deposits.
If your CPA already prepares a profit-and-loss statement, a P&L program can establish income without combing through 12–24 months of statements.
Bank Statement Loans — frequently asked questions
Do I really not need tax returns for a bank statement loan?
Correct — no tax returns and no 4506-C transcript are required. You qualify with 12 or 24 months of bank statements instead. The lender still verifies your identity, assets, and credit, and still makes an ability-to-repay determination.
Can I use personal or business bank statements?
Both are eligible. Personal statements generally use a 0% expense factor but the deposits should trace to your business. Business statements use an expense factor (often around 50%) to account for overhead, which a CPA letter can sometimes reduce.
What credit score do I need?
The program starts at a 640 FICO. A higher score can improve your loan-to-value tier and pricing, but 640 is the documented floor for this program.
How much can I borrow?
Loan amounts scale with your down payment: up to 90% loan-to-value to $1M, 85% to $2.5M, and 80% to $5M. Larger loans simply require more equity or down payment.
Why is my qualifying income lower than my total deposits?
Two reasons: an expense factor is applied to business accounts to account for overhead, and non-income deposits (internal transfers, loan proceeds, one-time sales) are excluded so they don’t inflate the figure.
How long do I need to have been self-employed?
Most investors look for about two years of self-employment. Some allow a shorter history with compensating factors such as strong reserves or a higher credit score. We match your file to the investor whose guideline fits your timeline.
Can I do a cash-out refinance with a bank statement loan?
Yes. Cash-out is available, including delayed financing if you recently purchased a property with cash and want to pull equity back out.
Can I buy an investment property or second home this way?
Yes. Bank statement loans are available for primary residences, second homes, and investment properties, including non-warrantable condos.
Is the interest rate higher than a conventional loan?
Non-QM programs are priced independently of conventional loans and vary by file. Because we shop your scenario across 25+ investors, we compare offers for the best terms your profile supports rather than accepting a single lender’s price.
Can I take title in my LLC?
Yes, LLC vesting is permitted on this program, which many business owners prefer for privacy and structuring reasons.
What if I have both W-2 and self-employment income?
We can often blend documented W-2 income with bank statement income, or route you to the program that presents your combined picture most accurately. The qualifier quiz helps us see the full picture quickly.
Talk to the Cook Brothers about your file
We shop your scenario across 25+ non-QM investors to find the guideline that fits how you actually earn. Start with the two-minute qualifier or reach out directly.
Non-QM loan programs. Alternative income documentation required. All loans subject to underwriting approval, income/asset verification, and ability-to-repay determination. Not all applicants will qualify. Program availability and guidelines subject to change without notice.