Can a Contractor Get a Bank Statement Loan From a Big Bank?

The Quick Read: Usually not. Bank statement loans are non-QM products, and they sit mostly with non-bank lenders, wholesale channels, portfolio lenders and some credit unions rather than at the largest retail banks. A contractor with heavy write-offs can still qualify on documented income under the applicable program, subject to lender guidelines, but the path usually runs through a broker.

• Big retail lenders mostly write to standard conforming boxes, so alternative documentation rarely fits their menu.
• Smaller portfolio banks and credit unions hold loans on their own books and can set their own rules.
• Through select lenders in Lendmire’s wholesale network, a primary-residence purchase or rate-term refinance can reach up to 90% LTV on 12 months of statements.
• If the contractor is buying a rental, a property-income loan may fit better than a deposit-based one. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.

Contractors run into the same problem again and again. The business makes real money, but the tax return shows little of it. Equipment, vehicles, subcontractor costs and depreciation all shrink taxable income. A big bank’s automated underwriting reads that return and sees a thin earner. That gap is why bank statement lending exists.

Why Do Big Banks Mostly Pass?

Large retail banks usually originate to standard qualified-mortgage boxes. Those loans carry a legal presumption of compliance, which bank statement loans give up. A bank that sells most of its production into standardized channels has little reason to build a manual, deposit-based product.

The federal consumer-finance regulator’s newsroom release on the repayment-capacity rule explains that lenders are presumed to have complied if they issue Qualified Mortgages. Non-QM loans don’t get that presumption. That’s the logic, and it’s the broker’s read of the incentives rather than a quoted bank policy. Some large banks may well have exceptions. “Rarely” is safer than “never.”

Underwriting also takes more work. Bank statement files are largely reviewed by hand. Someone reads the deposits, strips out transfers, and judges the business. High-volume retail operations are built for the opposite.

What Counts as a “Big Bank” Here?

The label matters because search results contradict each other. Some pages say banks offer these loans and others say they don’t. Both can be true, because “bank” covers very different institutions.

The realistic “bank” route is the small portfolio institution. The regulator’s small-creditor category covers community banks and credit unions with less than $2 billion in assets that make 500 or fewer first-lien mortgages a year, per the same newsroom release cited above. That’s a regulatory category, not proof that any given institution offers the product. It does explain why small lenders have more room to write their own rules.

How Does a Lender Read a Contractor’s Deposits?

A lender averages 12 months of business or personal statements and treats the average as income. Across Lendmire’s wholesale network, 12 months is the working window, though individual lenders vary. The steps are consistent:

1. Statement window. Twelve months of consecutive statements, personal or business.

2. Deposit scrub. Transfers between your own accounts, refunds and one-off deposits come out.

3. Expense factor. On business accounts, the lender applies an expense factor to turn deposits into net income. The factor depends on the lender and the business. Some programs accept an accountant-prepared expense statement or profit-and-loss instead of a standard factor.

4. Debt comparison. Adjusted monthly income is compared against all monthly debts.

5. Credit, assets and reserves. Reserves commonly run around six months of the housing payment.

For contractors, the expense factor is where the file is won or lost. Subcontractor payroll, materials and the type of business all push the number. A contractor who pays subs out of the same account that receives customer payments will see large deposits that are mostly pass-through. Underwriters scrutinize that, and a clean accountant-prepared expense ratio often helps more than arguing over the standard factor.

Lenders can’t wave this through. For owner-occupied loans, the ability-to-repay rule still requires a good-faith look at income, debts and credit. The Federal Register summary of the rule lists eight underwriting factors creditors must consider at a minimum. Modern bank statement lending still verifies deposits. It isn’t stated income.

Contractor Deposit Situations, Side by Side

Declining deposits are a red flag. If the last few months run well below the first few, expect questions and possibly a lower qualifying figure.

A Contractor Example With Round Numbers

Picture a general contractor whose tax return shows modest net income after depreciation, truck write-offs and subcontractor costs. Month after month, though, the business account takes in steady customer payments. A conventional underwriter sees the return and offers little. A bank statement program averages the 12 months of deposits, applies a lender-specific expense factor, and may arrive at a materially higher qualifying income. This example is illustrative only. Actual results depend on the lender, the factor, credit and the property.

On a primary residence, that contractor could be looking at up to 90% LTV on a purchase or rate-term refinance, with stronger files earning the top of the range. On an owner-occupied cash-out, the ceiling drops to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio. Loan sizes in the network run roughly $125,000 to $3,500,000, subject to lender guidelines.

What Do Big Banks Offer Contractors Instead?

Conventional financing can still work. Most lenders want two years of steady self-employment, and averaging two years of tax-return income is the standard route. If the returns support the loan, conventional is usually cheaper than non-QM, and it’s the better first check.

The flip point is write-offs. When the return understates what the business really earns, or the self-employment history is short, conventional runs out of road. That’s when a deposit-based program earns its extra cost.

Another option is asset depletion. Qualifying from liquid assets runs to about 80% LTV on a primary residence in the network. It suits contractors with large savings and lumpy income. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.

One note on terms: “bank statement loan” sometimes means a business credit line. This article covers mortgage financing against real estate.

If You Already Bank With a Big Bank

A checking relationship doesn’t change the product menu. A big bank’s mortgage division generally follows its own standardized guidelines, and your deposit history rarely overrides that. It’s still fair to ask a loan officer directly whether any alternative-documentation program exists. If the answer is no, you’ve learned something in one call. Then ask whether a local portfolio bank or credit union nearby writes these loans.

The Rental Twist: Maybe You Don’t Need Statements at All

If the contractor is buying a rental, the bank statement question may be the wrong one. Occupancy decides which framework applies. An owner-occupied file, whether a primary residence or second home, is a consumer mortgage and carries full consumer disclosure rules. A non-owner-occupied rental, including a short-term rental, is a business-purpose loan.

DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, so a contractor’s write-offs and messy deposit trail matter far less. Lendmire’s complete DSCR loans guide covers how that test works.

“Business purpose” isn’t automatic, though. It turns on occupancy and what the loan is really for, and a creditor determines it case by case.

Investment purchase leverage on bank statement documentation varies by lender. If you’re buying rentals, the investor-focused leverage guidance belongs on the DSCR side.

If a Big Bank Says No

Read the denial. If it cites tax-return income, you’ve found the exact gap a bank statement program is built for. Don’t reapply to a second big bank expecting a different answer. Switch channels. A broker can show the same file to several programs, which matters because expense factors and overlays differ by lender. The strictest overlays want cleaner separation of personal and business funds. A few lenders in the network are more flexible on seasonality.

Before you apply:

• Pull 12 consecutive months of statements for the account you want used.
• Stop moving money between personal and business accounts where you can.
• Ask your accountant whether an expense statement is worth preparing.
• Document large one-off deposits so they can be explained or removed.

Pros, Cons and Cautions

The upside is access. Real earnings count even when the return hides them. The downside is cost and scrutiny. Non-QM generally costs more than conventional, and these loans aren’t regulated like FHA, VA or USDA loans. Programs vary, so compare structures rather than one headline. If a lender promises approval before looking at your deposits, walk away. 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.

Consumer mortgage licensing covers 16 states, so availability for owner-occupied files depends on where the property sits. This is not a commitment to lend.

Key Terms Defined

Non-QM loan: A mortgage that falls outside the standard qualified-mortgage rules, usually with alternative income documentation.

Expense factor: The percentage a lender subtracts from business deposits to estimate net income.

Portfolio lender: A bank or credit union that keeps loans on its own books and sets its own guidelines.

Deposit scrub: The review that removes transfers, refunds and one-time deposits from the income calculation.

Business-purpose loan: Credit for a non-owner-occupied rental, which is reviewed differently from an owner-occupied mortgage.

About Lendmire

A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. CFPB newsroom, ATR rule amendments

2. Federal Register, Ability-to-Repay and Qualified Mortgage Standards