ALTDOCWhat income do your deposits actually show?
Write-offs that save you money at tax time can erase the income a bank wants to see. A bank statement loan looks at deposits instead of returns. Put your numbers in to see roughly what that produces. Nothing is saved and nothing is required to see the result.
Illustration only — not a quote, an approval, an income verification, or a commitment to lend. Actual qualifying income depends on which deposits are eligible, the expense factor the program applies, and full underwriting review.
How the income is derived
The method is deliberately simple: total the eligible deposits, divide by the number of months in the period to get an average, apply the expense factor, and adjust for ownership share. If a business deposits $480,000 over 24 months, that averages $20,000 a month; at a 50% expense factor and full ownership, the qualifying income is $10,000 a month.
The expense factor is the part that moves the number most. It exists because deposits are revenue, not profit — the program has to account for the cost of producing that revenue somehow. A flat factor is the default on many programs; some allow a lower documented figure when a CPA or licensed tax preparer states the actual expense ratio, and some do not permit a fixed factor at all. That variation is a program question, not a math question.
Which deposits count is the other half. Money moved between your own accounts, loan proceeds, tax refunds, and gifts are generally not revenue, so a raw bank total and the figure an underwriter reaches will usually differ. Large or unusual deposits typically need an explanation.
Why this exists
Aggressive but legitimate write-offs are the point of good tax work — and they are exactly what makes a conventional debt-to-income calculation fail for a self-employed borrower. A bank statement program measures the business the way the business actually behaves: money in, over time. It is not a lower standard, just a different lens.
Common questions
What is the expense factor, in plain terms?
The share of deposits treated as the cost of doing business rather than income. 50% is a common starting point on business accounts; a CPA or licensed tax preparer can sometimes document a lower actual ratio. Personal accounts are often handled differently. Which applies depends on the program and the documentation.
12 months or 24 months?
Both exist. Twenty-four months smooths seasonal or lumpy revenue; twelve can better reflect a business that recently grew. Which is available — and which produces the better answer — depends on the program and on how the deposits look.
Which deposits count?
Generally those representing business revenue. Transfers between your own accounts, loan proceeds, refunds, and gifts are typically excluded. Large or irregular deposits usually need an explanation.
Do I still need tax returns?
The income analysis is built from deposits rather than returns — that is the defining feature. Other documentation still applies, and requirements vary by program and scenario.
Is this calculator a quote or an approval?
No. It is arithmetic on numbers you supplied. It does not price a loan, verify income, check eligibility, or commit anyone to anything.
Have a scenario?
Send the deposit picture and what you are trying to buy or refinance. A person who has structured these will tell you where it lands.