Do bank statement loans use business or personal bank statements?
The full answer
Bank statement lenders reconstruct your income from 12–24 months of deposits, and the account type sets the starting arithmetic. Deposits into a personal account are treated mostly as yours; business bank statements are discounted by an expense factor because some of that money runs the business.
Expense factors are program-specific: 50% is a common default, service businesses with thin overhead may get 30–40% with a CPA letter attesting to actual expense ratios, and inventory-heavy businesses can be assessed higher. The same $400,000 of business deposits might yield $200,000 qualifying income at one lender's default and $260,000 with a documented 35% factor — worth shopping.
Practical hygiene decides these files: keep business and personal money separated, avoid large unexplained transfers between your own accounts being double-counted, and expect the lender to exclude non-business deposits (refunds, transfers, gifts). Estimate your own numbers with our bank statement income estimator before a lender does.
Can I mix business and personal statements?
Some programs allow it, but most require one method for the full 12 or 24 months. Mixing mid-period invites questions about which deposits were counted and why.
What if I'm not the only owner of the business?
Your qualifying deposits are usually reduced to your ownership percentage, evidenced by an operating agreement or CPA letter. A 50% owner generally gets credit for half the business deposits.
Related questions
If this came up, these usually do too — the short answer to each, with a link to the full breakdown:
- 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 qualif…
- Do I need two years in business for a bank statement loan? Usually two years, but not always.
- Can I get a mortgage without tax returns? Yes, through non-QM loans.
Sources
- CFPB — Consumer Financial Protection Bureau
- IRS — Self-Employed Individuals Tax Center
- CFPB — Ability-to-Repay and Qualified Mortgage rule
- IRS — About Form 1065 (partnership return and Schedule K-1)
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.