Ownership Percentage on Business Bank Statement Loans

On a business bank statement loan, the business's deposits aren't all the borrower's income. If the borrower owns part of the business, qualifying income is usually scaled to their share.

A common calculation

Eligible deposits × ownership % × (1 − expense factor) ÷ number of months

Illustrative example: $480,000 of eligible deposits over 24 months, 50% ownership and a 50% expense factor gives $480,000 × 50% × 50% ÷ 24 = $5,000 a month.

Lenders differ on details such as minimum ownership, how co-owners who are both borrowers are treated, and whether personal statements are used instead. Check the program before you calculate.

Confirming ownership

Lenders typically want a document showing the percentage, such as a CPA letter, operating agreement, articles or tax filings. Use the percentage the document supports, not the borrower's estimate.

Common mistakes

• Using 100% for a borrower who owns less.
• Confusing ownership of the business with signing authority on the account.
• Applying ownership twice.

FAQ

What if two borrowers each own part of the business?

Lender rules differ. Check how the program treats co-borrowers who are both owners.

What document confirms ownership?

Commonly a CPA letter, operating agreement or tax filing. Your lender decides what's acceptable.

Does ownership matter on personal bank statements?

Usually not in the same way, since personal deposits are already the borrower's. Check the program.

Sources

No external sources are cited. This article describes general practice; program rules vary by lender, so check the current guide for the loan you're working on.

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