Business Bank Statement Mortgage
Business Bank Statement Mortgages
You run your income through an LLC or S-corp. Personal account commingling is the last thing you want to explain to underwriting. Total Quality Lending’s business bank statement mortgage qualifies you on business statements alone — three income-calc methods, your choice.
Business bank statement loan advantages
- Use 12 or 24 months of business statements only
- No personal account statements or transfers required
- Three income-calc methods — choose the strongest result
- Up to 90% LTV on primary residence
- Loans from $150K to $4M
- No tax returns, no W-2s, no 4506-C, no AUS findings needed
Three ways to calculate your income
Total Quality Lending offers three independent income-calc methods on business bank statement loans. Pick whichever maximizes your qualifying income.
- 1
Method 1 — Fixed Expense Ratio (50%)
Underwriting takes total eligible business deposits and applies a flat 50% expense ratio. The remaining 50% ÷ # of statements = your qualifying monthly income. Simplest method, no CPA required.
- 2
Method 2 — 3rd-Party-Stated Expense Ratio
Your CPA, EA, or tax preparer signs a letter stating your actual business expense ratio. The ratio cannot be less than 10%. This method usually wins when your real expenses are well under 50% (service businesses, consulting, software, etc.).
- 3
Method 3 — 3rd-Party-Prepared P&L
A CPA, EA, or tax preparer prepares a Profit & Loss Statement covering the 12 or 24 months. Underwriting uses the P&L net income directly as the qualifying income. Best fit when your books are already kept by a third party.
Program details
Business bank statement loans live inside Total Quality Lending’s Prime Time program in the Std/Bank Stmt/1099 LTV column — the same matrix as 12-month, 24-month, and 1099 paths.
At 720+ FICO with a loan ≤$1.5M on primary residence, max LTV is 90% purchase, 85% rate/term, 80% cash-out. Investment property at the same FICO/loan tier caps at 85% purchase. For the full LTV matrix across all FICO and loan-amount tiers, see Prime Time loans.
Reserves: 3 months PITIA at ≤80% LTV, 6 months at 80.01–85%, 12 months above 85%. Loans >$1.5M require 9 months; loans >$2.5M require 12 months. DTI caps at 50% (55% allowed on primary at ≤80% LTV with $3,500/mo residual income).
Property types: single-family attached/detached, 2–4 unit (max 85% LTV), condominiums (max 85% LTV), condo hotels (max 85% LTV / $2.5M cap), rural properties (max 80% purchase / 75% refinance). State overlays in CT, FL, IL, NJ, NY: 85% purchase / 80% refinance, $2M loan cap.
Business bank statement mortgage — FAQs
What is a business bank statement mortgage?
A business bank statement mortgage is a non-QM loan that qualifies self-employed borrowers using deposits from 12 or 24 months of business bank statements only — no personal statements, no tax returns. Total Quality Lending offers this under the Prime Time program.
Who should use the business path vs the personal path?
Use the business path when most of your business income lands and stays in a business account (LLC, S-corp, or sole-prop business checking). Use the personal path when business deposits flow into a personal account, which is common for sole proprietors and freelancers without a separate business entity.
Which of the three income methods should I pick?
Whichever produces the highest qualifying income that still passes underwriting. Service-based businesses with low overhead usually win with Method 2 (CPA-stated ratio). Borrowers without a CPA relationship default to Method 1 (50% fixed). Borrowers already getting books prepared by a CPA often use Method 3 (P&L).
Does my CPA need to be licensed in a specific state?
The preparer must be a licensed CPA, an Enrolled Agent (EA), a CTEC-registered preparer, or a tax attorney. They do not need to be in the same state as the property. They must be independent — a borrower's own employee cannot prepare the letter or P&L.
What's the minimum expense ratio for Method 2?
10%. If the CPA-stated ratio is below 10%, Total Quality Lending will use 10% as the floor. There is no maximum cap on the stated ratio.
Can I use a business bank statement loan for an investment property?
Yes. Business bank statement loans are eligible on primary, second home, and investment occupancies. Max LTV at 720 FICO with a loan ≤$2M is 85% purchase, 80% rate/term, 75% cash-out on investment property.
What credit score do I need?
620 minimum. Top tier unlocks at 720+. Interest-only is permitted at 660+ FICO up to 90% LTV.