Both qualify self-employed borrowers without the net income on tax returns. A bank statement loan reads your deposits; a 1099 loan reads the 1099 forms your clients send you.
Side by side
| Bank statement loan | 1099 loan | |
|---|---|---|
| Income comes from | 12 or 24 months of personal or business bank statements | One or two years of 1099 forms |
| How income is worked out | Deposits, less non-income deposits, less an expense factor on business accounts | 1099 earnings less a standard expense factor |
| Best for | Business owners with many customers and mixed deposits | Contractors and gig workers paid by a few clients |
| Tax returns | Not needed for income | Not needed for income |
| Paperwork | More: lenders review every month of statements | Less: the forms, plus proof the income continues |
When a bank statement loan fits
- You own a business with many customers.
- Your clients don’t send 1099s, or not for all of your income.
- Your deposits are steady and clearly business income.
When a 1099 loan fits
- Most of your income arrives on 1099s.
- You have one or a few clients.
- Your bank statements mix in transfers that would be hard to explain.
Guides and calculators
- Self-employed loans
- Bank statement income calculator
- Self-employed income calculator
- Bank statement vs profit and loss loans
- CPAs and tax advisors
Questions
Can I get a mortgage if I’m a 1099 employee?
Yes. Traditional loans usually average two years of 1099 income after expenses on your tax returns; a 1099 loan uses the forms themselves with a standard expense factor, which often qualifies you for more.
Which counts more income, bank statements or 1099s?
It depends on your expenses. If your real costs are low, either can beat your tax returns. Running both on your numbers is the only way to know.
Do I still need to show tax returns?
Not for income. Lenders still verify that your business exists and is active, often with a license, a CPA letter or a business listing.
