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(Guides) Updated Oct 7, 2026 · sources linked

Bank statement
income, step
by step.

Every non-QM bank statement program runs the same five steps: total the deposits, take out what isn't income, apply an expense factor to business accounts, apply ownership, and average over 12 or 24 months. The lenders differ on the details, so this guide shows where.

See it on sample data →Sources

(01) The formula

Five steps, one line of math.

For business bank statements the published programs we track all reduce to:

Qualifying monthly income = eligible deposits × ownership % × (1 − expense factor) ÷ number of months

Eligible deposits are gross deposits minus everything that isn't business income. For personal bank statements most of these lenders count 100% of eligible deposits with no expense factor, with exceptions covered in business vs personal statements.

(02) Step by step

How to work a file.

  • 1. Collect consecutive months. 12 or 24 months of complete statements, every page. Acra's calculator, for example, asks for one statement per month for the qualifying period.
  • 2. Total the deposits month by month. Use the statement's own deposit total where it has one, and check that the lines you read add up to it.
  • 3. Exclude what isn't income. Transfers from the borrower's other accounts, refunds and reversals, and large deposits you can't source. See what counts as an excluded deposit.
  • 4. Apply the expense factor and ownership to business statements: usually a fixed 50%, or a lower figure from a CPA or tax-preparer letter where the lender allows it. See expense factor explained.
  • 5. Average and sanity-check. Divide by 12 or 24, then check the trend and the NSF count against the lender's limits.

(03) Worked example

A 12-month business file.

A borrower owns 100% of an LLC. Twelve months of business statements show $412,000 in gross deposits. You exclude a $40,000 wire you can't source, $10,000 of transfers from savings and $2,000 of refunds, leaving $360,000 eligible.

Expense factorWho publishes itMonthly income
50% (standard)Newfi, Verus, A&D, Deephaven, Acra; Angel Oak's default$360,000 × 50% ÷ 12 = $15,000
70% (higher-expense industries)Angel Oak$360,000 × 30% ÷ 12 = $9,000
15% (CPA-letter minimum)Angel Oak$360,000 × 85% ÷ 12 = $25,500
10% (expense-letter minimum)Newfi, Verus, A&D$360,000 × 90% ÷ 12 = $27,000

At 60% ownership and the standard 50% factor the same deposits give $360,000 × 60% × 50% ÷ 12 = $9,000 a month. Deephaven requires at least 50% ownership for business statements; Angel Oak, Newfi, Verus and A&D publish 25% minimums.

(04) 12 or 24 months

When the 24-month figure isn't the answer.

A 24-month average can hide a decline. Two of the six lenders publish a rule for it:

  • Acra's calculator uses the lesser of the last-12-month and 24-month figures.
  • A&D says a consistent decline isn't averaged: the most recent, lower income is used.
  • Newfi treats declining income as ineligible; declining but stabilized income may use the most recent 12-month average.

Work both figures every time. If the last 12 months are lower, expect the lender to notice.

(05) Checks before you quote

What sinks files after the math.

  • NSFs and overdrafts against the lender's tolerance. See NSF and overdraft limits by lender.
  • Large deposits: Newfi and Verus flag any deposit over 50% of average monthly sales; Deephaven wants an explanation for deposits over 50% of the monthly gross average.
  • Ownership under the lender's minimum.
  • Missing months: income is still divided by the full 12 or 24, so a missing statement lowers the figure.

(06) Sources

Read the lenders' own documents.

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.

(07) FAQ

Questions brokers ask.

How do you calculate income from bank statements?

Add up 12 or 24 months of deposits, subtract deposits that aren't business income (transfers, refunds, unsourced large deposits), multiply business deposits by ownership and by one minus the expense factor, then divide by the number of months. Personal statements usually count 100% of eligible deposits.

What expense factor do lenders use?

The six lenders we track publish a standard 50% for business statements. Angel Oak uses 70% for some higher-expense industries. A CPA or tax-preparer letter can lower it to a published minimum: 10% at Newfi, Verus and A&D, 15% at Angel Oak. Acra's calculator applies a fixed 50%.

Do lenders use 12 or 24 months?

Both are offered. Acra uses the lower of the 12- and 24-month figures, A&D uses the most recent lower income when deposits decline consistently, and Newfi treats declining income as ineligible.

(08) Keep reading

Related guides.

Expense factor explainedGuideWhat counts as an excluded depositGuideBusiness vs personal bank statement loansGuideBorrower statement checklistFree printable

(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.

Run a file free →Statements never leave your browser