The Quick Read: A lender counts your business deposits as income only after subtracting an expense ratio, a percentage that stands in for the cost of running the company. It then divides what remains by 12 or 24 months and tests that monthly income against your debts, with debt-to-income capped at 50%. The percentage comes from the program, your business profile, or your accountant’s documentation. You do not pick it.
- Qualifying income equals eligible deposits, times one minus the expense ratio, times your ownership share, divided by the statement months.
- Across the wholesale network Lendmire places files with, fixed ratios run 20%, 40% or 50% by business type and headcount, or an accountant-provided ratio can replace them.
- Personal-account statements usually skip the ratio, but business statements do not.
- A lower ratio raises qualifying income without your business earning a dollar more.
- Every figure here is a typical guideline through select wholesale programs, subject to full underwriting.
Key Terms Defined
Expense ratio (or expense factor): The percentage of business deposits the lender assumes goes to operating costs, so only the rest counts as your income.
Eligible deposits: Deposits that represent real business revenue, after transfers between your own accounts, refunds and loan proceeds are removed.
Qualifying income: The monthly income figure the lender uses after applying the ratio and your ownership share.
Accountant-provided ratio: An expense percentage prepared and signed by a third-party tax professional, offered in place of the program’s fixed ratio.
Profit-and-loss (P&L) method: An income calculation built from a third-party-prepared profit-and-loss statement instead of a deposit haircut.
Debt-to-income (DTI): Your monthly debts, including the new housing payment, divided by your monthly qualifying income.
Why Don’t Lenders Count Every Deposit?
Deposits are not profit. A business that deposits a large sum in a year may keep only a fraction after payroll, rent, inventory and software. A lender that counted every dollar would overstate what you can afford.
Your tax return has the opposite problem. Heavy write-offs shrink adjusted gross income, so a healthy business can look weak on paper. Bank statements show cash that actually moved. The expense ratio is the bridge between the two. Kubera’s explainer describes the business option as an expense factor applied to gross deposits, with 50 percent a common starting point.
SuperMoney’s jumbo guide reports the same default of about 50% on business statements. It also notes that loans above the baseline conforming limit of $806,500 are jumbo. Those are market-wide figures. Across the wholesale network, the fixed ratios are tiered, and the next sections show how.
The Six Steps: How Expense Ratios Work on a Business Bank Statement Jumbo Loan
Underwriters follow roughly the same order on every file. Docsumo’s walkthrough describes the same sequence: eligible deposits, reduced by the expense factor, multiplied by ownership share, divided by the months.
1. Choose the account type and window. You can use 12 or 24 consecutive months of personal or business statements. The bank portfolio program, a jumbo program that carries files to $30,000,000, uses 12 months. Business statements need at least 25% ownership. Statements must be consecutive, and a transaction history never substitutes.
2. Scrub the deposits. The underwriter strips transfers between your own accounts, refunds and loan proceeds. Large or unusual deposits need a documented source or they come out.
3. Apply the expense ratio. The program’s fixed percentage, or your accountant’s, comes off the eligible total.
4. Apply your ownership share. Own 60% of the business and you get 60% of what remains.
5. Average to a monthly figure. Divide by 12 or 24. Averaging smooths seasonal swings, so one strong or weak month does not decide the file.
6. Run DTI and the rest of the file. Qualifying income is compared with the proposed housing payment plus your other debts. Credit, reserves and property are reviewed in parallel.
Transfers from your own business into a personal account are the exception to step 2. Those count at 100%, because the money has already left the business as owner pay.
How Does the Lender Pick the Ratio?
The program sets it, and your business profile decides which tier you land in. Across the wholesale network, a fixed-ratio file typically sorts like this, through select wholesale programs and subject to full underwriting:
| Business profile | Typical fixed expense ratio |
|---|---|
| Service business, no employees | Lower tier |
| Service business, 1-5 employees | Middle tier |
| 6+ employees, or any product business | Highest fixed tier |
| Accountant-provided ratio | As documented, if accepted |
| P&L method | Capped, per program guidelines |
Headcount drives the tiers because payroll is the biggest expense most businesses carry. Product businesses sit at 50% because deposits are counted before the cost of goods sold. That logic is why one expense assumption cannot fit both a solo consultant and a retail shop with inventory.
Programs differ. Some use fewer tiers, some start higher, and a few will take an accountant’s number but not a P&L. That is the practical value of shopping several programs on one file. For a deeper look at moving into a lower tier, Lendmire’s piece How to Win a Lower Expense Factor on a Service-Business Bank Statement Loan walks through the documentation.
What Do the Numbers Look Like?
These are modeled inputs, not market data. They show how much the ratio matters, using proportions only.
Same deposits, two businesses. A solo consultant sits in the 20% tier, so 80% of eligible deposits count as income. A staffed product business with identical deposits sits at 50%, so only half counts. The consultant’s qualifying income is 60% higher. If the consultant’s file ran at 30% DTI, the same housing payment against the product business’s income runs near 48%. That is just under the 50% ceiling.
Documenting a lower ratio. A business sitting at the 50% tier has its accountant certify a true ratio of 30%. On a jumbo balance, that can decide whether the file clears DTI at all.
Partial ownership. Two partners each own 50% of a business with strong deposits. Each partner counts only half of the post-ratio income. A buyer who assumed the full deposit total would overshoot badly.
Personal or Business Statements: Which Gets You More?
Personal statements generally skip the expense ratio. That sounds like a clear win, but deposits to a personal account often include transfers, reimbursements and non-income items, and those get removed. Business statements get the haircut but show cleaner revenue and support ownership share.
| Factor | Personal statements | Business statements |
|---|---|---|
| Expense ratio | Usually none | Fixed tier or accountant ratio |
| Ownership proof | Not needed for deposits | At least 25% ownership |
| Transfers from your business | Count at 100% | Excluded as internal transfers |
| Best fit | Owner pay flows to the account | Revenue and costs flow through the business |
Some borrowers can run both and take the stronger result. Ask which paths each program allows before you pick.
What Does an Accountant Letter Do, and Not Do?
A letter from a third-party tax professional can support a lower ratio, and it is often the highest-impact prep step. The lender still decides whether to accept it. Kubera notes that some lenders accept a CPA-prepared P&L to document lower costs.
The reason is verification. The CFPB’s Ability-to-Repay compliance guide expects creditors to verify what they rely on using reasonably reliable third-party records. A self-prepared P&L does not meet that standard, which is why the letter must come from someone outside your company. The same guide treats funds deposited into a consumer’s account as that consumer’s personal income when the creditor relies on them. That is the basis for counting owner transfers in full.
An underwriter may push back when the stated ratio does not match the statements, for example a certified 20% on a business with visible payroll and vendor payments. Consistency matters more than the number. A letter should name the business type, the period covered and how costs were derived.
Where the General Rule Breaks
Commingled accounts. Some programs allow personal and business money in one account, and many do not. Check before you submit.
Product-heavy businesses. Gross deposits can overcount revenue before cost of goods sold. A P&L method may fit better than a 50% haircut.
Multiple business accounts. Each account is scrubbed separately, and transfers between them are stripped so the same dollar is not counted twice.
Business funds for the down payment. Underwriters may ask whether pulling the cash hurts operations. Lendmire’s guide How to Use Business Reserves on a Super Jumbo Bank Statement Loan covers that question. Cash-out proceeds also cannot satisfy reserves above the super-jumbo line.
Rental purchases. The expense ratio belongs only to income-based underwriting. A DSCR loan tests property rent against the housing payment and ignores your personal income. Bank statement files count your personal debts, so an investor with many rentals may hit the 50% DTI ceiling sooner. Many investors use DSCR for the rental and keep bank statement underwriting for a primary or second home. The complete DSCR loans guide covers that path.
What Changes at Jumbo Size?
Larger loans mean more scrutiny and lower leverage. Through select wholesale programs, subject to full underwriting, a primary residence purchase typically runs up to 90% to $1,000,000, 85% to $2,000,000 and 80% to $3,000,000. Second homes and investment property run about five points lower at each size. Credit minimums also rise with balance.
The portfolio non-QM program carries files to $6,000,000 and generally wants a 660 credit score. The bank portfolio program covers twelve-month-statement files up to $30,000,000, with a 680 floor. Above the super-jumbo line, 700 applies. That line sits above $3,500,000 on a primary residence and $3,000,000 on a second home or investment property. Reserves typically run 3 months to $500,000, 6 months to $1,500,000 and 9 months above.
Above $4,000,000, everything is reviewed case by case before submission. A primary residence purchase typically tops out near 65% from $4,000,000 to $5,000,000, on review. Never plan around a flat maximum at that size.
Common Mistakes
- Counting gross deposits as income.
- Leaving transfers and loan proceeds in the total.
- Assuming 100% ownership on a partnership.
- Presenting a certified ratio that the statements contradict.
- Planning around a ratio before getting the program’s accepted documentation in writing.
- Sending a self-prepared P&L.
One more point: tax treatment can depend on how the funds are used and how the property is held, so keep clear records and speak with a qualified tax professional before relying on any deduction.
Frequently Asked Questions
Is the expense ratio always 50%?
No. About 50% is a common default across the market, but it is not a rule. Across the wholesale network, fixed ratios of 20%, 40% and 50% apply by business type and headcount, and an accountant-provided ratio can replace them where the program accepts one.
Can I choose my own expense ratio?
No. The program sets the fixed tiers. Your accountant can document a lower ratio, but the lender decides whether to accept it. Ask for the accepted documentation in writing before you plan around it.
Do personal bank statements get an expense ratio?
Usually not. Personal deposits are typically counted without the haircut, but transfers, refunds and loan proceeds are still removed. Owner transfers from your business into a personal account count at 100%.
How does the ratio affect how much I can borrow?
It sets qualifying income, and qualifying income drives DTI. A lower ratio raises income, which lowers DTI against the same payment. The 50% DTI ceiling then decides whether the loan amount clears.
Is a bank statement loan the same as stated income?
No. Income is documented through consecutive statements, scrubbed deposits and third-party records. It is reviewed on documented income under the applicable program, subject to lender guidelines.
Next Step
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Lendmire is a broker that arranges these loans through select wholesale lenders. Consumer mortgage lending is available in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. Program terms change, every file is underwritten individually, and nothing here is a commitment to lend.
Before you submit, run your own deposits through the formula once with a 20% ratio and once with 50%. The gap between those two answers shows how much your business type and paperwork matter on a jumbo file.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
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References
1. Kubera: bank statement loan explainer
2. SuperMoney: jumbo loans for self-employed borrowers
3. Docsumo: bank statement income verification
4. CFPB ATR/QM Small Entity Compliance Guide
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Get a Super Jumbo Bank Statement Loan With a Law Practice · DSCR vs Bank Statement Loan for a Jumbo Cabin or Rural Property · How to Use a CPA Letter for a Bank Statement Jumbo Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.