Business Owners:
Qualify Using Bank Deposits Only

Purchase Your Dream Home — No Tax Returns Required

Our specialized loan program allows you to qualify using business bank statement deposits as income.
This streamlined option makes it easier for business owners to secure financing.

Program Benefits:

• No tax returns required
• Use business bank deposits to qualify
• Eligible for single-family homes and properties up to four units

Bank Statement Loans: A Smart Mortgage Solution for Self-Employed Borrowers

For many self-employed individuals, qualifying for a traditional mortgage can be more difficult than it should be. Business owners, independent contractors, freelancers, gig workers, and 1099 earners often have strong incomes but face challenges proving that income through conventional mortgage guidelines. Fortunately, Bank Statement Loans offer an alternative solution designed specifically for self-employed borrowers.

What Is a Bank Statement Loan?

A Bank Statement Loan is a type of non-traditional mortgage that allows borrowers to qualify using their bank deposits instead of tax returns. Rather than analyzing taxable income reported to the IRS, lenders review personal or business bank statements to determine a borrower’s qualifying income.

This loan program was created to help self-employed individuals who legally maximize deductions on their tax returns. While these deductions help reduce tax liability, they can also make income appear lower on paper, creating challenges when applying for a conventional mortgage.

Bank Statement Loans provide another way for lenders to evaluate a borrower’s true earning potential.

Who Is a Good Candidate?

Bank Statement Loans are commonly used by:

• Self-employed business owners
• Independent contractors
• Freelancers
• Consultants
• Gig economy workers
• Real estate agents
• Sales professionals paid by commission
• Truck drivers
• Construction contractors
• Medical professionals with private practices

Generally, borrowers must be self-employed for at least two years, although some programs may allow one year of self-employment with previous experience in the same field.

How Income Is Calculated

Instead of requesting tax returns, lenders review either:

Personal Bank Statements

The lender examines deposits into a personal checking account over a 12- or 24-month period. Consistent deposits are averaged to determine monthly qualifying income.

Business Bank Statements

For business owners who deposit revenue into a business account, lenders review business statements and apply an expense factor to estimate net income. Some lenders use a standard expense ratio, while others may request a CPA letter verifying business expenses.

For example:

• Monthly deposits: $20,000
• Estimated business expenses (50%): $10,000
• Qualifying monthly income: $10,000

This income can then be used to determine mortgage eligibility.

Why Self-Employed Borrowers Use Bank Statement Loans

Many successful business owners write off expenses such as:

• Vehicle costs
• Office expenses
• Equipment purchases
• Marketing expenses
• Travel costs
• Home office deductions

While these deductions are completely legitimate, they often reduce taxable income reported on tax returns.

Consider this example:

A consultant generates $150,000 annually in gross revenue.

After business deductions, their tax returns may show only $55,000 of taxable income.

A conventional lender may qualify them based on the $55,000 figure.

However, their bank statements could reveal significantly higher cash flow, allowing them to qualify for a larger mortgage through a Bank Statement Loan program.

Benefits of Bank Statement Loans

Flexible Income Qualification

The biggest advantage is the ability to qualify based on actual cash flow rather than taxable income.

No Tax Returns Required

Many programs do not require personal or business tax returns for qualification purposes.

Higher Loan Amount Potential

Because income is often calculated differently, borrowers may qualify for larger loan amounts compared to conventional financing.

Ideal for Growing Businesses

Business owners experiencing growth may have income that isn’t fully reflected on previous tax returns. Bank Statement Loans can better capture current earnings.

Purchase, Refinance, and Cash-Out Options

Many Bank Statement Loan programs allow borrowers to:

• Purchase a primary residence
• Purchase a second home
• Refinance an existing mortgage
• Complete a rate-and-term refinance
• Access home equity through a cash-out refinance

Things to Consider

While Bank Statement Loans provide flexibility, there are tradeoffs.

Interest Rates May Be Higher

Because these loans fall outside conventional lending guidelines, rates are often slightly higher than traditional agency loans.

Larger Down Payments May Be Required

Some programs require a larger down payment depending on credit score, loan amount, and property type.

Strong Bank Statement History Is Important

Lenders want to see consistent deposits and healthy account management. Excessive overdrafts or unexplained large deposits can raise questions during underwriting.

Credit Still Matters

Although income documentation is different, lenders still evaluate:

• Credit score
• Assets
• Debt-to-income ratios
• Property type
• Overall financial profile

Example Scenario

Imagine a self-employed marketing consultant earning approximately $12,000 per month in business revenue.

After claiming deductions, tax returns show only $4,500 per month of qualifying income.

Under conventional guidelines, the borrower may struggle to qualify for the desired home purchase.

Using a Bank Statement Loan, the lender reviews 12 months of deposits and determines the borrower has sufficient income to qualify for a significantly larger mortgage.

The result is a financing solution that better reflects the borrower’s actual earning capacity.

Is a Bank Statement Loan Right for You?

If you’re self-employed and feel that your tax returns don’t accurately represent your income, a Bank Statement Loan may be worth exploring.

These programs were specifically designed for entrepreneurs, contractors, freelancers, and business owners who generate strong cash flow but may not fit conventional mortgage guidelines.

By focusing on bank deposits rather than tax returns, lenders can gain a more complete picture of your financial strength and help you achieve homeownership goals that might otherwise seem out of reach.

For many self-employed borrowers, a Bank Statement Loan isn’t just an alternative financing option—it’s the bridge between running a successful business and purchasing the home they deserve.