Will a slow winter season hurt qualification?

Not on a 24-month program. The two-year average absorbs seasonal swings between summer peaks and winter slowdowns.

Do equipment write-offs lower my income?

No. Section 179 write-offs reduce taxable income but not deposits, which is what bank statement loans qualify on.

Can I use multiple business accounts?

Yes. All accounts receiving business deposits are aggregated for the monthly average.

Can I finance my home and a rental?

Yes — a bank statement loan for the primary residence and a DSCR loan for the rental, qualified independently.

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Mortgages for trades business owners

Q: Can a contractor get a mortgage with low Schedule C income?

Yes. Bank statement programs qualify on 12–24 months of business deposits, not the depreciated Schedule C net.

Electricians, plumbers, HVAC, and contractor owners qualify on 12–24 months of business deposits — not the Schedule C net that equipment write-offs and seasonal swings deflate. A 24-month average smooths winter dips into real income.

By Sunrise Lending

Why trades owners get declined

A profitable trades business often shows a thin Schedule C net after truck depreciation, tool and equipment write-offs, and crew payroll. Conventional underwriting reads that net as your income. Bank statement programs read your deposits instead — the cash that actually moved through the business.

What you need to know

Qualify on 12–24 months of business deposits, not tax-return net income
A 24-month average absorbs seasonal swings (summer peak, January–March slowdown)
Section 179 truck and equipment write-offs do not reduce bank-statement income
CPA letter can lower the 50% expense factor when real overhead runs lighter
Multiple accounts (operating, payroll, savings) are aggregated for the deposit average
Contractor license and entity docs (LLC, S-corp, DBA) round out the file
Owners with rental property can run a DSCR loan in parallel on the investment side

The trades income problem

A successful electrical, plumbing, roofing, or HVAC business can gross seven figures and still show an $80K–$120K Schedule C net once a truck fleet, Section 179 equipment write-offs, material costs, and technician payroll come out. Conventional underwriting opens that tax return, reads the net, and declines a borrower who clearly runs a healthy operation. The business is real — the tax strategy just made the taxable number small.

How bank statement programs read a trades business

A bank statement loan averages your business deposits over 12 or 24 months and applies a 50% expense factor by default. The remaining half becomes qualifying income. For a trades owner depositing $70K a month, that is roughly $35K/month of qualifying income — a number that reflects the cash actually flowing through the business rather than the depreciated tax figure.

Seasonality is a feature here, not a problem

Trades revenue is rarely flat. Roofing and HVAC peak in summer; many trades slow from January through March. A single-month or even a single-quarter look would distort that pattern. The 24-month average is built to smooth it — a slow winter is offset by a strong summer, and the lender sees the true annualized cash flow. If your most recent 12 months are clearly trending up, ask whether a 12-month look produces a higher number.

Lowering the expense factor with a CPA letter

The 50% default assumes half your deposits go to operating costs. Many trades businesses run leaner than that. A CPA letter on letterhead documenting your actual expense ratio — say 38% — overrides the default and raises qualifying income. On $70K/month of deposits, moving from a 50% to a 38% factor adds roughly $8,400/month in qualifying income. It is one of the highest-leverage steps a trades owner can take before applying.

Common questions

Can a contractor get a mortgage if the Schedule C shows low income?: Yes. Bank statement programs qualify trades owners on 12–24 months of business deposits, not the Schedule C net. Truck depreciation, Section 179 equipment write-offs, and material costs reduce taxable income but do not reduce your deposit-based qualifying income.
Will a slow winter season hurt my qualification?: Not on a 24-month program. The two-year average absorbs seasonal swings — a January–March slowdown is offset by your summer peak. If recent months are clearly trending higher, a 12-month look may produce a stronger number; your officer compares both.
I just wrote off two new work trucks. Does that lower my income?: Not for a bank statement loan. Section 179 write-offs reduce your Schedule C net but not your deposits. The program qualifies on what hit your business accounts, so a recent equipment write-off has no effect on your qualifying income.
I run deposits through three business accounts. Is that a problem?: No. All accounts that receive business deposits — operating checking, a payroll account, a savings reserve — are combined for the monthly average. Provide complete statements for each, and the lender aggregates them.
I own my shop and a rental property. Can I finance both?: Yes, and many trades owners do. A bank statement loan can finance your primary residence while a DSCR loan finances the rental on its own rent-to-payment ratio. Your personal income is not part of the DSCR calculation, so the two files run independently.

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Related resources

Sources

1.U.S. Bureau of Labor Statistics. Electricians — Occupational Outlook Handbook — Accessed June 2026
2.Internal Revenue Service (IRS). Section 179 Deduction — Publication 946 — Accessed June 2026
3.U.S. Small Business Administration (SBA). Small Business Facts and Self-Employment Data — Accessed June 2026

Bank statement program requirements — look-back period, expense factor, credit minimums, LTV limits, and reserves — vary by lender. Final approval, terms, and rates are determined by the lender after full underwriting. Not a commitment to lend.

Sunrise Lending · Equal Housing Opportunity. Matching rules are written and reviewed by licensed mortgage professionals. All loan decisions are made by licensed mortgage professionals. Not a commitment to lend. Loan approval subject to underwriting guidelines. This is not financial advice.