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 on your specific program, because some investment-property versions do.
Six things that sink a trades file
Almost all of them are fixable, but only if you catch them before underwriting does.
Running the truck payment through the wrong account
Mixing personal and business money makes deposit averaging unreliable and invites exclusions. Clean separation for the months before you apply is worth real dollars.
Cash jobs
Cash that never hits the bank never counts. Deposited cash may still be questioned if it doesn't match your invoicing pattern. Deposit consistently and invoice everything.
The unexplained big deposit
An insurance claim check, an equipment sale or a family loan will get sourced. Undocumented, it's excluded from income, and a large one can raise questions about the whole file.
Buying equipment mid-application
A new truck or excavator financed during underwriting adds a monthly obligation to your DTI and drains the reserves you were counting on. Wait until after closing.
Switching banks between pre-approval and closing
Lenders pull updated statements right through closing. Moving to a new account mid-file restarts the averaging and can cost you weeks.
Applying in your slowest month
Landscapers and pavers applying in February on a 12-month look-back get a very different number than they would in October. Timing and statement period are strategy, not paperwork.
From statements to keys
Most NH bank statement files close in 21 to 35 days from contract.
Statement review
Send 12 months. We calculate your likely qualifying income before anything is formally submitted. Soft pull only.
Lender match
We shop the file across non-QM investors and compare expense factors, seasonality treatment and pricing.
Pre-approval
Letter issued within 24 to 72 hours of complete documentation, so you can write offers with confidence.
Underwriting & close
A human underwriter reviews the file, the appraisal comes in, you sign and get the keys.
Contractor questions, answered
Can a contractor get a mortgage with low taxable income?
Yes. A bank statement loan qualifies a contractor on 12 or 24 months of bank deposits instead of Schedule C net profit, so business write-offs like equipment, vehicles and materials don't reduce qualifying income. Typical requirements are a 620+ credit score, 10% to 20% down, and two years in the same trade.
How do lenders calculate income for a self-employed contractor?
The lender totals eligible deposits over the statement period, divides by the number of months, and applies an expense factor, commonly 50% on business accounts. A CPA, EA or tax preparer letter documenting your actual expense ratio can lower that factor on lenders that accept one. Personal-account statements are often counted closer to full value, since that money is already what you pay yourself.
Do I need tax returns for a bank statement loan?
No. Bank statement programs are designed to qualify you without federal returns, W-2s, K-1s or pay stubs. You'll still provide bank statements, ID, asset documentation for down payment and reserves, and proof the business has existed for roughly two years.
My business is seasonal. Will winter hurt my approval?
Not if the statement period is chosen correctly. Landscaping, paving, masonry and snow-removal businesses generally do better on a 24-month program, which averages strong and slow months together. A 12-month program weights your most recent year more heavily and tends to favor growing service businesses with steadier year-round deposits.
I'm a sub paid on 1099. Is there a program for that?
Yes. Many of the same lenders offer a 1099-only program that qualifies you from one or two years of 1099 forms with an expense factor applied, skipping deposit averaging entirely. For framers, finish carpenters and drywall or paint subs working under general contractors, it's often simpler and produces a higher number than statements.
Can I use business account statements, or do they have to be personal?
Most programs accept business accounts, personal accounts, or a combination. Business accounts typically get an expense factor applied to reflect operating costs; personal accounts, where you deposit your draws or owner pay, are usually counted at or near full value. Which produces more depends on how you pay yourself, so it's worth calculating both.
Are bank statement rates higher than conventional rates?
Yes, typically. These are non-QM loans that don't sell to Fannie Mae or Freddie Mac, so they price above conforming. The exact spread depends on credit score, down payment, reserves, property type and lender. For borrowers who don't qualify conventionally at all, the practical comparison is against not buying, and many refinance into conventional financing later.
Can I use a bank statement loan for a two-to-four unit or an investment property?
Usually yes, with higher down payment and reserve requirements than a primary residence. For rental purchases, a DSCR program that qualifies on the property's rent instead of your income is sometimes the better fit, so it is worth comparing both before you apply.
How fast can I get pre-approved?
Pre-approval letters are typically issued within 24 to 72 hours of complete documentation, and most New Hampshire bank statement files close in 21 to 35 days from contract. The slow part is almost always gathering full statement PDFs, so start there.
Not a contractor? Same problem, different books.
Send the statements. We'll do the math.
Twelve months of deposits and a ten-minute call is all it takes to find out what you actually qualify for, before you spend another season assuming the answer is no.
NextGen Mortgage Loans, NMLS #1621958. NH Broker License #1621958MBRR, MA Broker License #MB1621958, ME Broker License #1621958, FL Broker License #MBR4542, RI Broker License #20265029LB. Licensed in NH, MA, ME, FL and RI. This page is for general information only and is not a commitment to lend, an offer of credit, or a rate quote. Program guidelines, expense factors, credit, down payment and reserve requirements vary by lender and by borrower and are subject to change without notice. All loans are subject to underwriting approval, income and asset verification, and property appraisal. Examples shown are illustrative and do not reflect any specific borrower or transaction. NextGen Mortgage Loans does not provide tax or legal advice; consult a qualified tax professional about your situation. Equal Housing Opportunity.
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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