Bank Statement Loans

A Bank Statement Loan is designed for self-employed borrowers who earn strong income but can’t qualify using traditional tax returns. Instead of W-2s and tax returns, lenders evaluate your actual deposits shown on 12 or 24 months of bank statements.

When a Bank Statement Loan Makes Sense

This may be a great fit if:

  • You’ve written off many expenses on your tax returns, causing your taxable income to appear lower than what you actually earn.

  • You’ve been self-employed for at least 12 months (most lenders prefer 24 months, but 12 is sometimes acceptable).

  • Most or all of your business income is deposited into one primary bank account (business or personal).

  • Your deposits may not be perfectly consistent, but they show a clear income pattern over the most recent 12 months.

  • You can verify that the deposits came from your business activity.

  • Your FICO® score is 620+.

  • You have at least 10% down for a purchase or 10% equity for a refinance.

  • You need a loan amount between $400,000 and $3,000,000.

How Income is Calculated

Personal Bank Statements

A Bank Statement Loan evaluates your income based on actual deposits, not tax returns:

  • 100% of eligible income deposits are counted.

  • Ideal for freelancers, sole proprietors, or anyone depositing business income into a personal account.

Business Bank Statements

  • A lender applies an expense factor (typically 10–50%).

  • This adjusts gross deposits to reflect realistic business expenses.

  • The exact percentage depends on the type of business — leaner businesses (consultants, online professionals, service providers) may receive a lower expense factor than a retail store owner.

Why Borrowers Choose Bank Statement Loans

  • Works for both home purchases and refinances

  • Flexible documentation requirements

  • Ideal for entrepreneurs, contractors, gig workers, and anyone paid outside a W-2 system

  • Loans available up to $3 million

  • Allows you to qualify based on real cash flow, not taxable income

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