Bank Statement Loans for NH Contractors & Trades
Your credit union read line 31 of your Schedule C and said no. A bank statement loan reads your deposits instead: 12 or 24 months of them, with no tax returns required.
At a Glance
- Who it's for: self-employed contractors, HVAC and electrical shops, roofers, masons, landscapers, plumbers, painters and site-work crews in southern New Hampshire.
- How you qualify: 12 or 24 months of personal or business bank statements, with no federal tax returns and no P&L requirement on most programs.
- Typical guidelines: 620+ FICO, 10% to 20% down, 3 to 12 months of reserves, DTI generally capped near 50%, loan amounts up to $3M+.
- Trade-off: rates run above conforming. For most trades files, the question is approval, not an eighth of a point.
- Timeline: pre-approval in 24 to 72 hours of complete docs; most files close in 21 to 35 days.
Good bookkeeping is why you got declined.
You bought the truck. You wrote off the fifth wheel, the compressor, the mini-excavator, the fuel, the general liability policy, the crew's 1099s, and the half of your phone bill that's really the office. Your CPA did exactly what you paid them to do: get your taxable income down.
Then you walked into the credit union, and an automated underwriting engine looked at two years of Schedule C net profit, divided by 24, and told you that you make $3,400 a month. You know what the business actually deposits. The tax return doesn't.
That's not a credit problem or an income problem. It's a documentation-method problem, and it is the exact problem non-QM bank statement programs were built to solve. Instead of adjusted gross income, the lender qualifies you on the money that actually landed in the account.
NextGen Mortgage Loans is a broker, not a single bank. We place trades files with multiple non-QM lenders, which matters here: expense factors, seasonality rules and 1099 treatment vary widely between programs, and the difference between two lenders on the same file is often tens of thousands in buying power.
What the tax return says vs. what the account says
An illustration of how the same HVAC shop looks to two different underwriting methods.
Qualified on Schedule C net profit
Qualified on 24 months of deposits
Illustration only, not a quote, a rate, or an approval. Expense factors, eligible-deposit rules and maximum loan amounts vary by lender and by file. Your actual figures depend on your statements, credit, reserves and property.
Want your version of this number? Run your deposits through the calculator, then send us the statements.
Built for the way your trade actually gets paid
Deposit patterns differ by trade. So do the programs that fit them.
General Contractors & Remodelers
Draw schedules and progress payments make month-to-month income look erratic. A 24-month average smooths the lumps; deposits tied to a contract are easy to source.
HVAC & Electrical Shops
Heavy equipment, van fleets and inventory crush net profit through depreciation. Deposits stay strong year-round, which is exactly what a bank statement program rewards.
Roofing, Siding & Masonry
Insurance-claim checks and large single-job deposits need clear sourcing. We flag those before underwriting sees them, so nothing gets excluded by surprise.
Landscaping, Hardscape & Snow
Six strong months and a slow winter is normal in NH, and it is why the 24-month option usually beats the 12-month one for seasonal crews, even in a good year.
Plumbing & Mechanical
Service-call volume means high deposit counts from many payers. Card-processor settlements and app payments count when they're consistent and traceable.
Subs Paid on 1099
Framers, finish carpenters, drywall and paint subs working under a GC often fit a 1099-only program that skips deposit averaging altogether.
How a lender turns deposits into qualifying income
Five variables decide your number. Getting them right before you apply is most of the job.
12 months or 24 months
Twenty-four months smooths a seasonal or uneven business. Twelve months weights your most recent year, which usually wins if the shop is growing or you added a crew.
Business vs. personal accounts
Business statements typically get an expense factor applied. Personal statements, where you deposit what you actually pay yourself, are often counted closer to full value.
The expense factor
Many programs default to 50%. A CPA, EA or tax preparer letter stating your real expense ratio can lower that materially on lenders who accept one. A service business with subs looks nothing like a materials-heavy remodeler.
Ownership percentage
If you own the LLC with a partner, most lenders prorate business-account deposits to your ownership share. Operating agreements get requested, so have yours ready.
Which deposits count
Transfers between your own accounts, loan proceeds, credit line draws and one-time windfalls are generally stripped out. Recurring customer payments are the ones that build your average.
When deposits are messy
If personal and business money have been mixed for years, a CPA-prepared P&L program or an asset-based program can be the cleaner path. Same borrower, different documentation lane.
Not sure which lane fits your books? Send twelve months of statements and we'll tell you which method produces the higher number.
Get a Free Review →Why this comes up constantly on the Route 3 corridor
Southern New Hampshire runs on small trade businesses, and a lot of them buy on the wrong side of a credit union's income calculation.
You live in NH, you bill in MA
Crews based in Hudson or Nashua working jobs in Lowell, Tyngsborough and Dracut are one of the most common trades files we see. Multi-state billing doesn't complicate a deposit-based file the way it complicates a tax-return file.
Corridor price points, credit union limits
Purchase prices in Merrimack, Litchfield, Amherst and Hollis often outrun what a Schedule C-based approval will support, even when the business easily covers the payment.
Non-QM sits outside NHHFA
Home Flex and Home Preferred are tied to agency-eligible loans, so bank statement programs don't overlap with them. If you might fit NHHFA, we'll tell you, since it is a better deal when it works.
Local office at 20 Trafalgar Square, Suite 304, Nashua NH. Licensed in NH, MA, ME, FL and RI.
More on our local team: Nashua mortgage broker.
The contractor's document list
Have these ready and a pre-approval is usually a 24 to 72 hour turnaround, not a two-week back-and-forth.
- 12 or 24 months of statements, every page, including the blank last page, from the accounts your customers actually pay into.
- Proof the business exists, such as NH Secretary of State registration, trade license, or a CPA letter confirming 2+ years in the same trade.
- Operating agreement if you have partners, showing your ownership percentage.
- Expense-ratio letter from your CPA, EA or tax preparer if you want a lower expense factor considered.
- Asset statements for down payment and reserves, since most programs want 3 to 12 months of payments left after closing.
- ID, and a written explanation for any deposit that isn't a normal customer payment.
Four ways a self-employed trade can be underwritten
Same borrower, four documentation methods. The right one is whichever produces an approval you can actually use.
| MOST TRADES Bank Statement |
Conventional (Schedule C) | 1099-Only | P&L Only | |
|---|---|---|---|---|
| Income documents | 12 to 24 months of statements | 2 years of returns + YTD P&L | 1 to 2 years of 1099s | CPA-prepared P&L, often + statements |
| Write-offs reduce income? | No, deposits drive the number | Yes, directly | No, gross 1099 with an expense factor | Partly, per the P&L |
| Best for | Shops with clean, steady deposits | Low write-offs, clean returns | Subs paid by a GC on 1099 | Mixed or messy accounts |
| Typical minimum credit | ~620 | ~620 | ~640 | ~660 |
| Typical down payment | 10% to 20% | 3% to 5% | 10% to 20% | 15% to 25% |
| Mortgage insurance | None on most programs | Required under 20% down | None on most programs | None on most programs |
| Rate vs. conforming | Higher | Lowest available | Higher | Higher |
Guidelines shown are typical ranges across non-QM investors and change by lender, program and file. Nothing here is a commitment to lend.
Yes, the rate is higher. That's the trade.
Bank statement loans are non-QM. They sit on lender balance sheets or sell to private investors instead of Fannie Mae, so they price above conforming. Anyone who tells you otherwise is selling something.
Here's the part that matters for a trades file: you are not currently choosing between 6.5% and 6.625%. You're choosing between owning the house and renting for another two years while you deliberately earn more taxable income, which means voluntarily paying thousands in extra tax to qualify for a slightly cheaper loan.
Run that math once and the eighth of a point stops being the headline. And the loan isn't permanent: many trades borrowers refinance into conventional financing later, once returns show more income or the business changes how it pays the owner. Most non-QM programs we place carry no prepayment penalty on owner-occupied homes, but confirm that detail with us before locking.
Ready to see what your deposits support?
Skip the Schedule C back-and-forth. Send 12 or 24 months of statements to our Nashua team, and we'll calculate your qualifying income line-by-line before you pay for an appraisal.
Disclaimer: NextGen Mortgage, Inc. is a licensed mortgage broker (NMLS #1621958) located at 20 Trafalgar Sq, Suite 304, Nashua, NH 03063. Licensed in NH, MA, ME, FL, and RI. Terms, rates, and availability of bank statement and non-QM loan programs are subject to market conditions, lender approval, borrower credit profile, asset reserves, and property appraisal. Nothing contained herein constitutes an offer to lend or a guarantee of rate lock. Programs described are for informational purposes only.
MLO License Info: NMLS #1621958, NH Broker license #1621958MBRR, and MA Broker license #MB1621958, ME Broker License #1621958, FL Broker License #MBR4542, RI Broker License #20265029LB
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