Do I need two years in business for a bank statement loan?
The full answer
A bank statement loan reads 12 or 24 months of business or personal deposits, applies an expense factor (often 40–60%), and uses the result as your qualifying income. The statement window and the business-history requirement are related but distinct: a lender may want two years of self-employment but only 12 months of statements, or vice versa.
Some non-QM lenders will work with a one-year business history when compensating factors are strong — good credit, meaningful reserves, a 15–20% down payment, or prior W-2 experience doing the same work. Because these are portfolio products, each lender sets its own overlays, so the answer genuinely varies.
A 24-month statement window also helps seasonal businesses by averaging busy and slow months, which can produce a higher, steadier qualifying income than a 12-month snapshot.
Do the bank statements have to be consecutive?
Yes. Lenders want an unbroken 12 or 24 months immediately before the application. Gaps, closed accounts or a mid-period switch of bank need a written explanation and usually statements from both institutions.
Which deposits don't count toward qualifying income?
Transfers between your own accounts, loan proceeds, gifts and one-off non-business income are all stripped out. Only recurring business revenue counts — which is why commingling personal and business funds makes the calculation harder than it needs to be.
Related questions
If this came up, these usually do too — the short answer to each, with a link to the full breakdown:
- Can I get a mortgage without tax returns?Yes, through non-QM loans. Bank statement loans qualify you on 12–24 months of deposits, P&L-only loans on a CPA-prepared profit-and-loss…
- What is an expense factor on a bank statement loan?The expense factor is the percentage of your bank deposits a lender treats as business expenses when calculating qualifying income. If your…
- How many years do you need to be self-employed to get a mortgage?Typically two years. Conventional, FHA, VA and USDA loans generally want a two-year self-employment history, though one year can work with…
- Can my LLC buy the house I'm going to live in?Generally no. Conventional, FHA, VA and USDA loans must close in the name of a person, not an LLC. Mortgages that do close in an LLC — like…
- Do bank statement loans use business or personal bank statements?Either, and the choice changes your qualifying income. Personal statements (with business income deposited to them) are often credited at…
Sources
- CFPB — Consumer Financial Protection Bureau
- CFPB — Ability-to-Repay and Qualified Mortgage rule
- IRS — Self-Employed Individuals Tax Center
Educational information only — not financial advice, and not a quote, pre-approval, or offer of credit. Program rules and ranges are illustrative and vary by lender. Mortgage Merlin is a publisher, not a lender or broker.