Qualify on Your Deposits Instead of Your Tax Return
If you are self-employed, you already know the problem. You run your business properly, you take the deductions you are entitled to, and then a lender reads your tax return and decides you cannot afford a mortgage — when your bank account says otherwise every month.
A bank statement loan uses your deposits instead. We look at 12 or 24 months of bank statements, work out what is genuinely coming in, and qualify you on that.
At a glance
- Minimum credit
- 640
- Maximum LTV
- 90% of value
- Statement period
- 12 or 24 months
- Timeline
- 30 days
Scope. Owner-occupied bank statement loans are available in California only. On investment property, business-purpose lending is brokered nationwide. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.How we calculate income
Who this fits
You are a business owner whose write-offs push your taxable income well below your actual cash flow
You were declined conventionally because your adjusted gross income did not support the payment
Your business has grown recently and a two-year tax average makes you look smaller than you are
You are a contractor, consultant, or freelancer with steady deposits
You own several entities and your returns are too tangled for conventional underwriting
You earn on commission — high, but uneven
Who this does not fit
You are a W-2 employee. These programs are built for self-employment. Full documentation will serve you better.
Your business runs largely on cash outside the bank. If it is not deposited, it cannot be counted.
Your tax returns actually do support the loan. Then conventional costs less, and we will check that before pointing you here.
Your business is brand new. There is a minimum operating history — ours is 2 years.
Your books are clean and your margins beat the standard formula. A profit-and-loss loan will usually produce a better number.
How we calculate your income
Your deposits
We total the qualifying deposits across the statement period. Some deposits do not count: transfers between your own accounts, loan proceeds, tax refunds, and one-off items that are not recurring business revenue. This surprises people, so we flag it early rather than late.
On business accounts, an expense factor is applied — only a share of deposits counts as income, because a business has costs. Ours is as low as 20%, so up to 80% of deposits can count toward income. Personal accounts are treated differently.
Your qualifying income
If you own part of a business rather than all of it, income is credited in proportion to your share.
The result is your qualifying monthly income. Everything after that — credit, reserves, loan-to-value, the property — is underwritten normally. Credit starts at 640 and we can lend up to 90% of value on a purchase.
You do not have to guess at the number. Yes. We will run a bank statement analysis before you formally apply.
What you will need
Statements
- 12 or 24 months of bank statements, every page.
- Evidence you are self-employed — a business license or a letter from your CPA or tax preparer.
- A CPA letter stating your expense ratio, on some programs.
- Evidence of your ownership percentage.
The file
- Credit report.
- Asset statements for your down payment and reserves.
- The purchase contract or current loan documents.
- An appraisal and insurance.
No tax returns.
The honest trade-offs
What it captures
This frequently produces a much higher qualifying income than the conventional calculation for the same borrower, and it captures recent growth that a two-year tax average buries.
What it costs
The costs: more than conventional, and a larger down payment. Gathering two years of complete statements is a genuine chore and people consistently underestimate it. The expense factor can cut your countable income more than you expect — the number often lands lower than borrowers hope, and we would rather say that now. Large irregular deposits will need sourcing and explanation.
Process and timeline
Typically 30 days. The slowest part is usually gathering the statements, which is in your hands — start early.
Before you spend anything on an appraisal
Scenario analysis, and a preliminary statement review.
Yes. We will run a bank statement analysis before you formally apply. You find out roughly what the deposits support before you commit to assembling everything.
Lender analysis
Expense factors and statement rules differ sharply between lenders, which is most of the value here. Placed from a panel of 20+.
Application to closing
- Full statement package
- Application
- Appraisal
- Underwriting
- Closing
Full statement package, application, appraisal, underwriting, closing.
Typical timeline30 days
Frequently Asked Questions
How does this actually work?
We add up the qualifying deposits across 12 or 24 months of your bank statements, subtract an allowance for business expenses, and use the result as your monthly qualifying income. Tax returns never enter it.
Personal statements or business statements?
Either, depending on the program — and they are treated differently. Business accounts have an expense factor applied; personal accounts generally do not.
What is an expense factor?
A percentage the lender assumes went to running your business rather than into your pocket. Ours is as low as 20%, so up to 80% of deposits can count toward income. The factor applied to your file depends on your business type and the lender's program, so the countable figure is established at the preliminary review rather than assumed.
Which deposits do not count?
Transfers between your own accounts, loan proceeds, tax refunds, gifts, and one-off items that are not recurring business revenue. This is where borrowers are most often disappointed, so we flag it at the start rather than at underwriting.
What if I have one large unusual deposit?
It will likely be excluded and you may be asked to document where it came from. Tell us about it early — it is a normal question, not an accusation.
12 months or 24?
Both exist. Twelve is less paperwork. Twenty-four may produce better terms and can smooth out a weak stretch.
How much income will I actually qualify for?
Usually meaningfully more than your tax return supports, but often less than your gross deposits suggest. Yes. We will run a bank statement analysis before you formally apply.
Do you need my tax returns at all?
Generally no.
How long must I have been self-employed?
2 years.
What if I own only part of the business?
Income is credited in proportion to your ownership share, so we will need something evidencing that percentage.
Do I need a CPA?
Not always, though some programs want a letter from a CPA or licensed tax preparer confirming your self-employment or your expense ratio. If you do have properly prepared accounts, look at profit-and-loss as well.
What credit score do I need?
640.
How much can I borrow against the value?
Up to 90% of value on a purchase.
Can I use this for an investment property?
Usually yes — though for a straightforward rental purchase, DSCR is often simpler because it skips your income entirely.
Is it more expensive than a conventional loan?
Yes. If your tax returns do support the loan, conventional will cost less and we will tell you so. We check that first.
Is this available outside California?
On investment property, yes — that is business-purpose lending and it is brokered nationwide. Owner-occupied bank statement loans are California only.
How long does it take?
Typically 30 days. The slowest part is usually gathering the statements, which is in your hands — start early.
My business is mostly cash. Does that work?
Only what reaches the bank can be counted. If most of your revenue never gets deposited, this program cannot see it.
Do you fund these yourselves?
No. We are a brokered business and place the file with the lender whose program fits it.
What happens next
The umbrella, if you are still deciding which income method reflects your business.
If your accounts are clean
If your accounts are properly maintained, the P&L route often produces a better number than a deposit formula does.
You are here
Bank Statement Loans
Qualify on deposits, not tax returns.
If the property is the income
The same self-employed borrower buying a rental. DSCR skips your income entirely and has no property limit.
Pulling equity out of the property you already own, in California.
Request a Scenario Analysis
Send a rough monthly deposit figure and the property you have in mind. Yes. We will run a bank statement analysis before you formally apply.
Nothing on this page or website constitutes an offer of credit, a rate quote, or a commitment to lend. All loans are arranged through third-party lenders and are subject to full application, credit approval, income/asset verification, property appraisal, and underwriting. Terms and availability are subject to change without notice. Loankey.io is a licensed real estate broker; loans are arranged, not made. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.