(Guides) Updated Oct 7, 2026 · sources linked
The expense
factor, explained.
The expense factor is the share of business deposits a lender assumes went to running the business. It is the single biggest lever on a business bank statement file: moving from 50% to a 10% letter nearly doubles the income.
(01) Defaults
What lenders assume.
| Lender | Default | Lower with a letter? | Published minimum |
|---|---|---|---|
| Angel Oak | 50%; 70% for some higher-expense industries | CPA, tax preparer or bookkeeping company statement | 15% (2022 FAQ) |
| Newfi | 50% fixed | Business expense statement letter, or third-party P&L | 10% |
| Verus | 50% standard | Third-party expense letter, or third-party P&L | 10% |
| A&D | 50% standard | Third-party expense letter or P&L | 10% |
| Deephaven | 50% fixed | Third-party prepared expense statement, or P&L | None published |
| Acra | 50% (calculator) | No letter option in the calculator | 50% fixed |
(02) Why it matters
The same deposits at five factors.
$360,000 of eligible business deposits over 12 months, borrower owns 100%:
| Expense factor | Calculation | Monthly income |
|---|---|---|
| 70% | $360,000 × 30% ÷ 12 | $9,000 |
| 50% | $360,000 × 50% ÷ 12 | $15,000 |
| 30% | $360,000 × 70% ÷ 12 | $21,000 |
| 15% | $360,000 × 85% ÷ 12 | $25,500 |
| 10% | $360,000 × 90% ÷ 12 | $27,000 |
(03) The letter
Getting a lower factor.
A lower factor needs a third party's word for it: a CPA, enrolled agent or tax preparer letter stating the business's expense ratio (Angel Oak also names bookkeeping companies). A ratio under the lender's minimum isn't used as written; the minimum applies. DepositDesk raises a letter's figure to the selected lender's minimum and says so on the worksheet.
Ask the borrower's tax professional early. It is the document most likely to hold up a closing, and it belongs on the borrower checklist.
(04) The P&L route
When the P&L replaces the factor.
Some programs let a third-party P&L set income, with the bank deposits used to check the P&L's revenue:
- Newfi: deposits greater than or no more than 15% below P&L revenue; income is the lower of P&L net or deposits.
- Verus: deposits no more than 20% below revenue; the same lower-of rule.
- Deephaven: average deposits within 20% of P&L gross revenue; income = P&L net × ownership ÷ 12.
- A&D: deposits no less than 10% below the P&L's gross revenue.
P&L revenue $400,000, deposits $350,000: 12.5% below. Inside Newfi's 15% and Verus's and Deephaven's 20%; outside A&D's 10%.
(05) Sources
Read the lenders' own documents.
- Angel Oak Mortgage Solutions: Bank statement program page (read Oct 7, 2026) · how DepositDesk applies it
- Angel Oak Mortgage Solutions: Angel Oak Mortgage Solutions FAQ post, Sep 2, 2022 · how DepositDesk applies it
- Angel Oak Mortgage Solutions: Mortgages for self-employed guide, Aug 23, 2022 · how DepositDesk applies it
- Newfi Wholesale: Newfi Lending Rainier Matrix, effective for locks on/after Feb 19, 2026, rev. Mar 3, 2026 (pp. 17, 29–37) · how DepositDesk applies it
- Newfi Wholesale: Non-QM submission checklist, bank statement · how DepositDesk applies it
- Verus Mortgage Capital: Correspondent Non-Agency Seller Guide §2.7.6, Nov 11, 2024 · how DepositDesk applies it
- A&D Mortgage: Non-QM Loan Eligibility Guidelines §6.6.8, Sep 24, 2026 · how DepositDesk applies it
- Deephaven Mortgage: Bank statement features sheet, Jan 19, 2023 · how DepositDesk applies it
- Deephaven Mortgage: Wholesale underwriting guidelines §8.3–8.4, effective Jan 10, 2022 · how DepositDesk applies it
- Acra Lending: Acra Lending bank statement calculator, version v20250102 (from the broker resources page) · how DepositDesk applies it
Guidelines change without notice; dates are shown on each lender page. DepositDesk is independent and isn't affiliated with, endorsed by or approved by any lender named here. This guide is general information for mortgage professionals, not underwriting or legal advice.
(06) FAQ
Questions brokers ask.
What is the expense factor on a bank statement loan?+
The percentage of business deposits the lender assumes was spent on business expenses. Income = deposits × ownership × (1 − expense factor) ÷ months. The six lenders we track publish a standard 50%.
Can a CPA letter lower the expense factor?+
Yes, where the lender allows it, down to a published minimum: 10% at Newfi, Verus and A&D, 15% at Angel Oak (2022 FAQ). Acra's calculator applies a fixed 50%. Deephaven accepts a third-party expense statement but publishes no minimum.
What expense factor applies to personal bank statements?+
Usually none: most programs count 100% of eligible personal deposits. Angel Oak's 2022 FAQ is the exception: personal statements take the business factor unless the borrower provides 2 months of business statements.
(07) Keep reading
Related guides.
(Next step)
Run the numbers on a real file.
Drop in 12 or 24 months of statements and DepositDesk builds the worksheet with these rules applied, every exclusion explained. Your first file is free; statements never leave your browser.