How New Business Owners Can Buy A Home

Starting your own business is exciting—but it can also complicate things when you’re ready to buy a home. Most banks don’t know how to handle new entrepreneurs. They ask for two years of tax returns you don’t have, income statements that don’t reflect reality, and W-2s that never existed. All this spells denial for the buyer—forcing you to sit on the sidelines for years when you could enjoy homeownership today.

But the truth is you don’t have to wait. If your business has been open for at least a year and your bank statements show consistent income, you can buy a home right now. No tax returns, no corporate financials—just proof that your business is real and generating cash flow.

That’s where bank statement loans come in. These programs are built specifically for self-employed borrowers, freelancers, and small business owners who earn solid income but can’t document it the traditional way. They’re flexible, common-sense loans designed for people who actually run businesses—not people who just collect pay stubs.

You Don’t Need Tax Returns to Buy a Home

If you’re self-employed, you already know that traditional mortgage rules don’t always make sense. Banks want two years of tax returns, pay stubs you don’t have, and W-2s that don’t apply to you. But here’s the truth: you don’t need tax returns to buy a home. Not anymore. If your business has been open for at least one year, and your bank statements show consistent income, you can qualify for a mortgage using your deposits instead of your tax filings.

That’s the power of a bank statement mortgage—a loan designed for entrepreneurs, freelancers, and business owners who don’t fit inside the box. These programs use your business or personal bank statements to verify income. No tax returns. No 1099s. No endless explanations about write-offs. Just proof that your business is real, active, and generating money.

How Bank Statement Loans Work

For new business owners—especially those in their first year—this is a game-changer. Most lenders turn away borrowers who can’t provide two years of tax history, but that’s because they rely on rigid conventional or FHA guidelines. A bank statement loan works differently. As long as your company has been operating for at least twelve months, and the deposits show steady or growing revenue, a mortgage broker can structure your loan based entirely on your cash flow.

Instead of handing over your tax returns, you’ll provide twelve or twenty-four months of bank statements. Your lender will average your monthly deposits to calculate income. If your business is healthy—meaning the deposits are regular, not sporadic—you’re in a strong position to qualify. For example, if your company’s bank statements show $25,000 in monthly deposits, a lender might calculate $20,000 in usable income after applying a small expense factor. That number becomes the basis for your mortgage approval.

Why This Matters for New Business Owners

One of the biggest advantages of this approach is flexibility. Bank statement loans recognize that self-employed people reinvest, write off, and move money differently than W-2 employees. A high-quality lender isn’t trying to penalize you for using legitimate deductions—they’re looking at your real cash flow. That’s why these loans have become so popular with Texas entrepreneurs, consultants, and small business owners who earn strong revenue but show little taxable income on paper.

If you’ve only been in business for a year, documentation is still straightforward. You’ll need proof that your company is active—typically a business license, LLC filing, or CPA letter verifying the start date—and your most recent twelve months of statements. From there, underwriting focuses on cash flow consistency. If your deposits show a clear pattern of income, you can qualify even if your business is new. Some lenders prefer to see 24 months of statements, but one-year programs are common, especially for borrowers with strong credit or larger down payments.

Industry Experience Matters

Even though your business may be new, lenders want to see that you know what you’re doing. Most bank statement programs look for continuity between your current business and your previous career. That means if you were a tech salesperson who launched your own SaaS sales firm, or a CPA who opened a boutique accounting practice, your experience strengthens your file. It shows the lender that you’ve been earning in the same field and that your business income is sustainable, not experimental. If you can show a year of deposits and a proven track record in your industry, you’ll stand out from the average startup applicant.

Real Examples: New Businesses That Qualify

Take, for example, a marketing consultant in Austin who launched her LLC last summer. She’s been averaging $18,000 a month in business deposits and has excellent credit. Even without two years of tax returns, she can qualify for a $700,000 mortgage using only her bank statements. Or a lawyer in Houston who left a W-2 job to start his own law firm. His first year shows strong profits and steady deposits. With a one-year history and the right lender, he can still buy a primary residence or even a second home.

What Lenders Look For

The key is working with a mortgage broker who understands how to present your income correctly. Not all lenders handle bank statement loans the same way. Some accept personal statements, others require business accounts. Some apply a fixed expense ratio, while others work directly with your CPA to calculate actual expenses. A good broker knows how to match your file to the lender most likely to approve it—and at the best rate possible.

Because make no mistake, rates for bank statement mortgages are still competitive. They’re slightly higher than conventional loans, but the difference often amounts to a few hundred dollars a month. For most self-employed borrowers, that’s a small tradeoff for skipping the tax-return headache and getting into a home sooner.

How to Prepare for Approval

Buying a home with a young business takes planning, but it’s absolutely possible. Keep your business deposits consistent, avoid commingling funds, and make sure your credit profile is clean. If your business income is steady, a bank statement loan can unlock the same homeownership opportunities as any W-2 borrower enjoys.

The Bottom Line

At LendFriend Mortgage, we specialize in helping new business owners qualify without tax returns. Whether you’re a freelancer, startup founder, or small business owner in your first year, our team knows how to structure your loan for success. If you’ve been told to “wait two years,” don’t. You may be ready right now.

Get in touch today to learn how a self employed mortgage can help you buy your home without the wait. Give us a call at 512.881.5099 or reach out to us here. We’d love to be your partner in the process.