Route 02
Bank statements
Twelve or twenty-four months of deposits, with an expense factor applied. Built for owners whose tax return is written to minimise tax, not to qualify for a loan.
Who this is
- You have owned your business for at least two years
- Your returns show a small net profit after every legitimate deduction
- Your revenue lands in an account you can show, month after month
What you hand over
- 12 or 24 consecutive months of business bank statements
- A business licence, or a CPA letter confirming you own the business
- Ownership percentage, if the business has more than one owner
- An explanation for any deposit that is not revenue
How the figure is worked out
Eligible deposits are totalled, transfers and non-revenue credits are stripped out, an expense factor is applied to allow for the cost of running the business, and the result is divided by the number of statements. The expense factor is the lender’s assumption — often 50% on a business account — unless a CPA provides a figure the file can support.
Do the arithmeticWhat trips this route up
- A 50% expense factor is a default, not a law. A CPA-supported factor can be materially better or worse.
- Large irregular deposits are usually excluded unless you can source them.
- Personal-account programmes count a different set of deposits and price differently.
Where it leads
Programmes this route commonly unlocks
Demonstration form
Tell us about your deposits
Nothing on this form is sent anywhere. On a working site it would reach a loan officer with the route you arrived through already attached.
The other four
Most files use more than one
- Paystubs and W-2sThe straight strand. Salaried and hourly income, evidenced by paystubs, W-2s and a verbal verification of employment.
- Profit and lossA CPA-prepared profit-and-loss statement, sometimes with 1099s alongside it. The shortest route when your accountant already has the numbers.
- AssetsNo income used at all. A verified pool of liquid assets is divided across the term to produce a qualifying figure. Common for retirees and for people between ventures.
- Rental incomeThe property qualifies, not you. Market rent is compared with the full housing payment to produce a debt-service coverage ratio.