How to Qualify for a 24-Month Bank Statement Loan in an LLC

The Quick Read: A lender builds your qualifying income from two years of bank deposits, removes deposits that are not real business income, applies an expense factor to what remains, and averages the result over 24 months. That monthly income is then tested against the proposed housing payment and your other debts. Your LLC supplies the deposit history, but your credit, ownership share, and reserves are still reviewed.

• Qualifying income comes from deposits, not traditional personal-income documentation, so clean and consistent statements matter most.
• The lender sets the expense factor, and a CPA or accountant letter can sometimes support a lower one.
• Documented ownership in the LLC and a clear business history are part of the file.
• Transfers, refunds, loan proceeds, and unexplained deposits are usually excluded.
• Occupancy decides the loan type: owner-occupied files are consumer mortgages, while rentals are business-purpose.

What Is a 24-Month Bank Statement Loan?

A 24-month bank statement loan is a non-QM mortgage that uses two years of deposits in place of traditional personal-income documentation or W-2s. Experian describes it as a product for borrowers who cannot provide W-2s, pay stubs, or traditional personal-income documentation. It notes that business owners with one to two years of deposits to a business account can qualify.

It is classed as non-QM because deposits alone do not meet the qualified-mortgage test of a reliable and accurate income figure, as Kubera points out. Non-QM does not mean weak credit. It means the documentation or structure falls outside the standard box.

The same structure explains why the product exists. Heavy write-offs can leave an owner’s taxable income looking low even when cash flow is strong, and deposits show the cash flow before those adjustments, as Kubera’s explainer notes.

In practice, the file is reviewed on documented income under the applicable program, subject to lender guidelines. It is not a stated-income loan. Every lender still verifies income, debts, and credit.

How Underwriting Treats Your LLC Statements, Step by Step

Underwriting follows a repeatable sequence. Knowing each step lets you predict the number before a lender calculates it.

1. Pick the lookback and the accounts. The 24-month version averages the prior 24 months. Statements can come from a business account, a personal account, or both. An LLC’s operating account is the usual source.

2. Document the LLC and your ownership. Most programs want proof the business exists and proof of your ownership percentage. Typical items include a license, a Secretary of State filing, an EIN letter, or a CPA letter.

3. Screen the deposits. The lender adds up eligible deposits. It removes transfers between your own accounts, refunds, loan proceeds, gifts, and one-time asset sales. It also removes anything it cannot tie to business activity.

4. Apply the expense factor. On business-account deposits, the lender backs out overhead, payroll, and materials with a percentage. The lender sets that factor, not the borrower. This is the biggest lever on qualifying income.

5. Average over the lookback. The post-factor total is divided by 24 to produce monthly qualifying income.

6. Run the debt-to-income test. The income is compared with the proposed payment, taxes, insurance, and your other monthly debts.

7. Check credit, assets, reserves, and the property. Reserves commonly run around six months of the housing payment on programs in the wholesale network. An appraisal follows, and then closing.

Across the wholesale network Lendmire works with, the expense factor varies by lender, business type, and how well the file is documented. No single formula applies to every program. Treat any quoted figure as a starting point for a conversation, not a promise.

What Decides the Outcome?

Six variables move a file more than anything else:

• The expense factor the lender applies
• Deposit consistency and the trend across all 24 months
• Documented ownership share in the LLC
• Clean, separated accounts
• Credit profile and reserves
• Your ability to explain large deposits and transfers

Notice what is missing from the list: the property’s rent. On owner-occupied files, the borrower’s income carries the loan. On a rental, a different product may fit better, which a later section covers.

Can the LLC Itself Be the Borrower?

It depends on the occupancy and the program. The LLC can be the income source on almost any bank statement file, but title and vesting rules differ by lender. Many owner-occupied files close in the borrower’s personal name while the LLC’s deposits prove the income. Rental and investment files are more likely to allow entity vesting, subject to program terms.

Occupancy also decides the disclosure regime. A bank statement loan on a primary residence or second home is a consumer mortgage, and TRID disclosures apply. Know which category your property falls into before you structure the deal, because the paperwork and the leverage both follow from it.

Which Statements Should You Submit?

Submit the account that shows your income most clearly. That is not always the biggest one.

Personal-account programs often skip the expense factor but demand a clear pattern of business income. If you run business income through a personal account, many programs treat it as a business account anyway. Treatment varies, so ask before you assume.

Owner draws, distributions, and payroll also change which account tells the cleanest story.

How Your Income Is Calculated: A Worked Illustration

The math is simple once you see the sequence. This example uses an index of 100 for gross deposits, so no real dollar amounts appear. Every figure is a modeled assumption, not a quote or a program term.

• Gross deposits across 24 months: index 100.
• Excluded deposits (transfers, refunds, loan proceeds): assume 10 points removed, leaving 90.
• Expense factor: assume the lender applies 30%, which removes 27 points and leaves 63.
• Averaged over 24 months, that 63 becomes your monthly qualifying income.

Now consider how sensitive the result is. If the lender uses a higher expense factor, qualifying income falls point for point. If a CPA letter supports a lower factor, income rises. Estimate your buying power from this post-factor figure rather than from gross deposits.

Averaging also cuts both ways. If your last six months are much stronger than the first eighteen, a 24-month average dilutes the recent growth. If your income is lumpy or seasonal, the longer window smooths the swings in your favor.

Why 24 Months, and How It Compares With 12

The 24-month version is a separate product from the 12-month version, with its own documentation rules. The programs the wholesale network places most often start from 12 months of statements, and some lenders offer the longer window as an option or a requirement. Term length and documentation follow each lender’s program sheet.

Choose based on the shape of your deposits. A borrower with a recent surge usually prefers the shorter window. A borrower with a dip in the last year may prefer the longer one, or may need a different structure altogether. For a closer comparison, see Lendmire’s side-by-side of 12-month versus 24-month bank statement loans in an LLC.

Documents to Gather

An underwriter wants each item for a reason. Having them ready keeps the file moving.

Regulators accept bank account statements as one valid way to verify income. The CFPB’s small-entity guide to the ability-to-repay rule lists financial institution records alongside traditional income documentation and payroll statements. The same rule requires lenders to weigh items such as the payment, taxes, insurance, other debts, and verified credit history, as the CFPB’s ATR/qualified-mortgage compliance guide explains. That is why a bank statement file is documented, not undocumented.

Leverage, Loan Size, and Reserves

Program figures depend on what the property is. These are typical ranges on select programs in Lendmire’s wholesale network, subject to lender guidelines, credit, and property review.

The 90% figure applies only to a primary residence purchase or rate-and-term refinance, and stronger files earn the top of that range. Owner-occupied cash-out uses a fixed expense ratio, and an accountant-prepared ratio can bring it to 75%. Investment cash-out tops out around 75%. Investment purchase leverage on bank statement documentation varies by lender, so treat it as a case-by-case question.

Loan amounts commonly run from about $125,000 to $3,500,000. Reserves are commonly around six months of the housing payment. Credit minimums and pricing differ by lender and file.

Red Flags in Your Statements, and the Fix for Each

Most stalled files trace back to a handful of statement problems.

• Commingled accounts. Personal and business spending in one account blurs income. Separate them well before applying.
• Transfers between your own accounts. These are generally excluded. Transfers from another business account need paperwork showing a business source.
• Large one-time deposits. A lender will ask where they came from. A written explanation and a source document keep them from being stripped out.
• Overdrafts and returned items. Frequent ones raise questions about cash management. Some lenders have set tolerances for them.
• Missing pages or months. Incomplete statements delay review. Download full statements directly from the bank.
• Declining deposits. A falling trend is hard to explain away. A CPA letter and a clear story about the cause can help.

The federal consumer-finance regulator’s compliance guide is explicit that it summarizes the rule rather than replacing it.

A 90-Day Readiness Plan

Three months of cleanup can raise your qualifying income and shorten the underwriter’s questions.

1. Days 1 to 30: Separate business and personal spending. Stop moving money between accounts without a record of why.

2. Days 31 to 60: Gather entity documents, confirm your ownership share, and ask your CPA whether a letter or profit-and-loss statement can support a lower expense factor.

3. Days 61 to 90: Pull every statement page, write short explanations for large deposits, and check your credit for errors. Confirm reserves are seasoned and documented.

When a Different Loan Fits Better

Bank statement loans and DSCR loans answer different questions. The first qualifies your income. The second is reviewed on the rent a property earns. Investors with strong LLC deposits but a thin-rent property often favor bank statements. Investors with messy books but a property that covers its payment often favor DSCR.

Sub-1.00 DSCR programs are available through select lenders in the network, though leverage and terms adjust. Lendmire’s piece DSCR Loan Vs Bank Statement Loan For Investors walks through that decision. For the full picture on investor financing, the complete DSCR loans guide covers the rental side in depth.

Extended terms such as 40-year and interest-only structures are DSCR-side offerings, not bank statement features. Do not plan around them on an alt-doc file.

Key Terms Defined

Non-QM: A mortgage that falls outside the qualified-mortgage standard, usually because of how income is documented.

Expense factor: The percentage a lender subtracts from business deposits to estimate overhead before counting income.

Lookback period: The number of months of statements the lender averages, such as 12 or 24.

Eligible deposit: A deposit the lender accepts as business income after removing transfers, refunds, and loan proceeds.

Asset depletion: A method that qualifies a borrower from liquid assets instead of deposit averages.

Reserves: Liquid funds held after closing, commonly expressed in months of the housing payment.

Next Step

Lendmire is a mortgage broker that arranges financing through select lenders in its wholesale network, and investors can reach the team at 828-256-2183. Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.

This article is educational and is not legal or tax advice. Program terms, eligibility, and leverage are subject to lender guidelines and are not a commitment to lend, so consult a qualified attorney or CPA about your own situation.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 41 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.

References

1. Experian: What Is a Bank Statement Loan?

2. Kubera: Bank Statement Loans

3. CFPB ATR/QM Small Entity Compliance Guide

4. CFPB Ability-to-Repay and Qualified Mortgage Compliance Guide