How are pass-through payments treated?

A lender may exclude money you collect and pay to someone else if it can be traced. Keep invoices that show it.

What if I am paid in cash on small jobs?

Cash that never reaches an account cannot be counted. Depositing it regularly, with records, helps over time.

Bank Statement Loans for Contractors and Tradespeople

Short answer

Tradespeople and builders often use business statements with an expense factor, and lenders may look closely at materials and subcontractor costs. Project-based deposits make a longer window helpful.

Why statements fit trades and construction

Construction revenue passes through the business and goes right back out as materials, labor and permits. Taxes on what is left are modest, so a return can look thin. The account itself shows the real volume of work.

How a lender reads your deposits

The reviewer sees deposits from customers, draws from general contractors and sometimes lender-funded progress payments. Because costs are heavy, the expense factor is often a deciding number. Subcontractor payments should be traceable, and the same dollars should not be counted twice.

What to watch for

Customer deposits collected before a job is complete.
Pass-through payments to subcontractors that look like income.
Large equipment purchases made from the same account.
Slow months in cold or wet seasons.

Documents to gather

Business statements for the window
Contractor license and insurance
A letter from a tax professional that describes the business
Contracts or invoices for the largest payments
Proof of years in the trade

Illustrative scenario. A remodeler collects staged payments from homeowners. The reviewer excludes a $20,000 pass-through he paid directly to a subcontractor, then applies the program's expense factor to the remaining deposits.

General information only. Each program sets its own rules, and a lender must verify your income and ability to repay.

Trades and construction by city

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