CPA letter for a bank statement loan in Arizona: when it lowers your expense factor.
If you run a low-overhead business, the standard expense factor on a bank statement loan can shrink your income more than it should. A CPA letter is how we fix that. It lets us use your real expense percentage, so your deposits count closer to what you actually keep.
What can a CPA expense letter do, and what can it not do?
A CPA expense letter does one thing: it states the percentage of your business deposits that goes to running the business. We use that number to set the expense factor on a bank statement loan. Lower real expenses mean more of your deposits count as income.
Here is what it cannot do. It does not raise your deposits, change your tax returns, or override a program floor. It is not income proof on its own, and it never replaces the bank statements themselves. We still review 12 or 24 months of deposit history and average it. The letter only adjusts the slice we subtract for expenses.
When does a CPA letter actually lower the expense factor?
It helps in one situation: your real operating expenses are below the program default. Most programs start somewhere between 50% and 75%, depending on the investor and your business type. If your default is 50% but your CPA confirms you run at 20% expenses, we can use 20% and far more of your deposits count.
The reverse is also true. If your true expenses run higher than the default, the letter does nothing for you. We just keep the default factor, because that already counts more income than your real numbers would. So the letter is a tool for lean operations, not a magic discount for everyone.
One more point. Some programs set a floor, like 10% or 20%, and will not go below it even with a clean letter. We confirm the floor before we ask your CPA to write anything, so nobody wastes time on a letter that cannot move the number.
Why do some lenders reject CPA letters or require a P&L instead?
Investors disagree on how much they trust a short expense letter. A two-sentence note saying "this business runs at 15% expenses" is easy to write and hard to verify. So some lenders want the work shown.
That is where a CPA-prepared profit and loss statement comes in. A P&L lists revenue, each expense category, and net for the period. It is harder to inflate and easier for an underwriter to sanity-check against the deposits. Some investors accept either document. Some take only the letter. Some take only the P&L. A few will not lower their factor at all. None of this is visible from the outside, which is why the program choice matters more than the paperwork. See our P&L only loans page for the version that leans entirely on that statement.
How does this play out for different businesses?
Three quick examples make the rule concrete. Same deposits, very different outcomes.
| Business | Real expenses | Does a CPA letter help? |
|---|---|---|
| Lean consultant, home office, no staff | Around 15% | Yes. Well below a 50% default, so the letter counts far more income. |
| Restaurant, food cost, payroll, rent | Often 70% or more | No. Real costs sit above the default, so we keep the default factor. |
| General contractor, materials and subs | It depends | Maybe. Big jobs run material-heavy; service work runs lean. We model both. |
The consultant is the classic win. A solo Scottsdale consultant might deposit $18,000 a month with almost no overhead. At a 50% default factor she qualifies on $9,000. With a CPA letter at 15%, she qualifies on $15,300. That is a real swing in buying power, and it comes straight from documenting her actual costs.
The restaurant owner is the opposite. Food, labor, and rent eat most of the revenue, so the default already flatters him. We would never ask his CPA for a letter that hurts his file. The contractor sits in the middle and is the reason we look at the work mix before deciding anything.
How do we use a CPA letter on your file?
We start by pricing your file three ways: conventional, bank statement with the default factor, and bank statement with a CPA letter. If the conventional loan qualifies you for what you need, we run that, because it is usually the cleaner and cheaper path. We only reach for the letter when the bank statement route wins and the lower factor adds real income.
When the letter helps, we tell you the exact percentage your CPA needs to support and which document the program wants, a letter or a full P&L. Your CPA writes it, signs it, and adds their license number. We submit it with your statements. That keeps the request specific, so your preparer is not guessing what the underwriter expects.
Bottom line: a CPA letter is a precision tool for low-overhead businesses, not a default step. Want to know if yours is lean enough to benefit? Read more on our bank statement loans page, see all programs, or send your numbers below and we will run all three scenarios.
Talk to Mike — No Obligation, No Script
Quick question or ready to start? Mike reviews every inquiry personally. Usually responds same business day.
CPA Letter for a Bank Statement Loan — Frequently Asked Questions
What is a CPA letter for a bank statement loan?
A CPA letter is a signed statement from your tax preparer that estimates the percentage of your business deposits that goes to operating expenses. On a bank statement loan, we apply an expense factor to your deposits to get your qualifying income. The CPA letter lets us use that real expense percentage instead of the program's default factor, which on most files runs between 50% and 75%.
Does a CPA letter lower the expense factor?
It can, but only when your real operating expenses are below the program default. If the default factor is 50% and your CPA states your business runs at 20% expenses, we can use 20%, which leaves more deposit income to qualify on. If your true expenses are higher than the default, the letter will not help and we keep the default factor.
Who can write the CPA letter?
A licensed CPA, an enrolled agent, or in some cases a licensed tax preparer who has prepared your returns can write it. The person has to have a professional relationship with your business and stand behind the expense percentage. Most investors want the preparer's license number on the letter. A letter you write yourself does not count.
Do all lenders accept CPA letters?
No. Some investors accept a CPA expense letter, some require a full CPA-prepared profit and loss statement instead, and a few will not lower the factor below their floor no matter what. Because guidelines differ, we match your file to the program that treats your numbers best before you ever apply.