What a bank statement loan is
A bank statement loan is a home loan that measures income from the money that actually arrived in the borrower’s accounts rather than from the income reported on a tax return. It was built for one problem: a business owner whose accountant has done a good job. Depreciation, expensed vehicles, home office, retirement contributions and every legitimate write-off reduce taxable income, and a conventional underwriter reads that reduced figure as the borrower’s ability to pay. The bank statements tell a different story, and the bank statement loan reads them.
The programs sit inside the non-QM world, meaning outside the qualified mortgage rules that conventional lenders sell to, and are underwritten on the ability to repay demonstrated by deposits. Loan Goat’s bank statement program is written for exactly this borrower: distinct approval parameters for borrowers who have demonstrated the ability to repay a loan but cannot qualify for a standard mortgage program, qualifying on personal or business bank statements, with flexible documentation, high LTV and competitive pricing.
Who it is for
- Self-employed borrowers with write-offs. Contractors, consultants, agents, owners of restaurants and shops, professionals in practice: strong cash flow, low taxable income.
- Investors with many rentals. Depreciation across a portfolio produces paper losses on the personal return that a conventional underwriter counts against the borrower; the deposits show the rent.
- Flippers with uneven income. A year with three sales and a year with one look the same on a bank statement average and very different on two tax returns.
- Business acquirers. A buyer who has just taken over a business has no personal tax history for it; the business’s statements carry the file.
- Borrowers with assets rather than income. Retirees and downsizers whose wealth is in accounts rather than pay; where an asset-based calculation applies, it is set in underwriting.
- Borrowers after a settlement. Divorce and estate settlements change income overnight; the recent statements are the accurate record.
The programs
12 to 24 months of bank statements
The core program. Twelve or twenty-four months of personal or business statements are totalled, adjusted and annualised. Loan Goat’s bank statement mortgage loan publishes terms of 5 to 30 years, Non-QM loans from $200,000 to $10,000,000, SFR, condo or townhome and 2-4 unit property, documentation of 12-24 months bank statements, and owner occupied and not owner occupied occupancy, with flexible expense factors and self-employed friendly underwriting.
Profit and loss only
For the business owner whose books are cleaner than the statements. The P&L-only business mortgage loan qualifies on the business’s 12 month profit and loss statement with no tax returns or W2s required: terms of 5 to 30 years, Non-QM loans from $200,000 to $10,000,000, documentation of P&L statements and a business license, and the same property types and occupancy as the bank statement program.
When the property should carry the file
An investor buying or refinancing a rental does not need to prove income at all if the rent covers the payment. The rental DSCR loan qualifies on the property’s cash flow: DTI not calculated, large deposits do not need to be sourced, 5, 7, 30 and 40 year fixed terms, LTV up to 80% and rates from 6.50% on the Non-QM tier. Many self-employed investors use the bank statement loan for the home they live in and the DSCR loan for the properties they rent.
How income is calculated
The mechanics matter because they decide the loan amount.
- Deposits. Every deposit over the statement period is listed. Transfers between the borrower’s own accounts, loan proceeds, refunds and one-off non-business items are excluded so that only income is counted.
- Documentation. Personal statements are the simplest read. Business statements need the borrower’s ownership percentage and, usually, a letter from an accountant or a licence confirming the business and its expense profile.
- Expense factors. Business deposits are revenue, not profit, so an expense factor is applied to estimate the profit share. The factor depends on the type of business: a consultant keeps most of the deposits, a contractor keeps less. Loan Goat’s card publishes flexible expense factors; the number on a specific file is set in underwriting.
- Annualising. The adjusted deposits are averaged over the period and annualised, and the result is the qualifying income the payment is measured against.
Declining deposits over the period, large unexplained deposits and commingled personal and business accounts are the three things that slow a file. Clean, separate accounts with a steady trend are the fastest path to a loan amount.
Qualifying
Beyond the statements, the file needs the things every mortgage needs: a credit score above the program floor, the down payment or the equity, reserves after closing, a property that fits the program (SFR, condo or townhome, 2-4 units) and, on a purchase, the contract. On an owner-occupied loan the process follows consumer lending rules, with disclosures and waiting periods that a business purpose loan does not carry, so the timeline is longer than the 5-7 day close Loan Goat publishes for its investor programs. Rates and pricing are subject to change without notice and are not a commitment to lend; the pricing guide explains the factors, and on bank statement loans the biggest are the credit score, the LTV and the length of the statement period.
Where bank statement loans fit
- Bank financing for the bank statement and P&L-only programs.
- Rental property loans for the DSCR loan when the rent should carry the file.
- Self-employed for the wider set of programs a business owner can use.
- Multi-family hard money loans when the investment property is an apartment building.
A bank statement loan does not lower the bar; it moves the measurement to where the income actually is. For a business owner with a good accountant, that is the difference between a decline and a home.
