Add-backs that help
Depreciation, depletion, amortization, business-use-of-home, casualty losses, and one-time expenses (with a CPA letter) are all added back to net business income. On a typical small-business return that recovers 5–15% of net income — sometimes far more if Section 179 was taken.
K-1 mechanics for 25%+ owners
Underwriting reviews the entire business return. Two tests: distribution sustainability (did the business earn what it paid out?) and business liquidity (3+ months of operating expenses on hand). Fail either and the K-1 income is reduced or excluded.
Bank statement programs
Ignore tax returns entirely. Qualifying income = deposits × (1 − expense factor). Expense factor is 50% for business statements, 0–15% for personal, 25–35% with a CPA P&L override. Strong fit when tax returns are artificially depressed by aggressive deductions.
Asset depletion
Qualifying income = (eligible assets × discount) ÷ 84–240 months. 100% of cash, 70–80% of brokerage, 60–70% of retirement. Best for pre-retirees and recently-exited founders.
Bring two years of returns.
15-minute review. We'll model 2–3 program paths and tell you what each prices at — before your credit is ever pulled.
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