Self-Employed in Burnaby? Here's the Truth About Getting Approved When Banks Say No

3-minute read

Your business is crushing it. Monthly deposits hit $15,000, $20,000, sometimes more. But when you walk into TD, RBC, or BMO with your Notice of Assessment showing $48,000 taxable income, they treat you like a financial risk. Sound familiar?

Here's what 73% of self-employed borrowers in Burnaby don't know: While traditional banks focus on your written-down taxable income, alternative B-lenders are approving mortgages based on your actual business cash flow using 12 months of bank statements. No tax documents required.

Why Traditional Banks Keep Saying "No"

1-minute reality check

Banks operate on rigid guidelines designed for salaried employees. When you're self-employed in Burnaby's competitive market, three factors work against you:

The Tax Write-Off Trap: You legally minimize taxable income through business expenses, vehicle depreciation, and home office deductions. Your accountant saves you thousands in taxes, but banks see low income on paper.

Income Fluctuation Penalty: Seasonal contractors, consultants, and small business owners rarely show identical income year-over-year. Banks want predictable W-2 consistency that doesn't exist in entrepreneurial reality.

Documentation Overload: Traditional lenders demand 2+ years of tax returns, business financial statements, profit/loss documents, and CPA letters. Even minor discrepancies trigger rejections.

Result? Qualified borrowers with strong businesses get declined while watching salaried employees with identical income (but on paystubs) walk away with approvals.

The B-Lending Solution: Bank Statement Programs

5-minute game changer

Alternative lenders recognize the gap between written income and actual cash flow. B-lending programs specifically designed for self-employed borrowers use 12-month business bank statement analysis to calculate your true buying power.

How Bank Statement Income Works:

Your mortgage broker burnaby bc specialist pulls 12 months of business banking activity and calculates average monthly deposits. The lender then applies a debt service ratio (typically 75-80% of gross deposits) to determine qualifying income.

Real Burnaby Example:

• Business deposits average $18,500/month over 12 months
• Calculated gross income: $222,000 annually
• Debt service ratio applied: 75% = $166,500 qualifying income
• Mortgage qualification: ~$750,000 (with 20% down)

Bank statements only for income—no NOAs or accountant letters. Typically available up to 80% LTV, ideal if you write off heavily but show strong, consistent cash flow.

Who Qualifies for Bank Statement Programs?

3-minute qualification guide

B-lenders have specific criteria that differ dramatically from traditional banks:

Minimum Requirements:

• 2+ years of self-employment in the same industry
• 10-20% down payment (higher than traditional 5%)
• Credit score 650+ (some lenders accept 600+)
• Business bank account showing consistent deposits
• Current business license and insurance

Income Calculation Method:
Lenders review monthly deposits, subtract any obvious loan proceeds or transfers, then average the remaining business income. Personal deposits don't count, they need legitimate business revenue.

Debt Service Ratios:
Unlike traditional banks using gross debt service ratio of 32%, B-lenders often accept total debt service up to 45-50% of calculated income.

Interest Rates and Terms: The Trade-Off Reality

2-minute cost breakdown

B-lending comes with a modest premium—typically around 1% above major bank rates—not the dramatic markup many expect. For growing businesses, that small spread is a very affordable bridge until you refinance back to A rates.

Current B-Lender Pricing (January 2025):

• Typical premium vs. traditional banks: ~1% (often 0.75%–1.50% based on credit, LTV, and file strength)
• Pricing varies by lender, product, and property type; unique or higher-risk files may be higher

Term Options:
Most B-lenders offer 1-3 year terms, not traditional 5-year mortgages. The strategy involves using B-lending to establish mortgage history, then refinancing to traditional lenders at renewal.

Total Cost Example (Burnaby Townhouse):

• $800,000 mortgage at 5.75% (B-lender) vs 4.75% traditional rate
• Additional annual interest cost: ~$8,000–$9,000
• Trade-off: Home ownership now with a plan to refinance vs waiting indefinitely for traditional approval

The Stated Income Alternative

2-minute advanced option

Some B-lenders offer stated income programs where you declare reasonable income based on industry standards without full bank statement analysis.

How Stated Income Works:
You state income consistent with your business type and geographic market. Lender verifies business existence, licensing, and basic financial stability, but doesn't calculate income from deposits.

Requirements:

• Higher down payments (25-35%)
• Strong credit scores (720+)
• Verifiable business operations
• Industry-appropriate income claims

Risk Factor: Overstating income creates qualification problems and potential legal issues. Work with experienced mortgage broker surrey specialists who understand reasonable income ranges by industry.

Alt-A Insured Solutions: Up to 90% LTV for Self-Employed

2-minute option

Insured “Alt-A” programs—offered through Canada Guaranty and Sagen—allow high-ratio financing up to 90% LTV using a reasonable stated income supported by business bank statements.

• What it is: Insurer-backed approvals that accept stated income validated by 6–12 months of business deposits and business documentation.
• What you can get: Purchases up to 90% LTV with pricing closer to A than typical B-lending.
• What it requires: Notices of Assessment (NOAs) to confirm 2-year business history and, crucially, to prove no outstanding CRA income tax arrears—plus clean credit and stable operations.
• Who it helps: Business owners with strong cash flow but modest declared net income who need higher LTV and competitive pricing.

Smart borrowers compare lender and insurer rules side by side. Speak with Varun Chaudhry to see whether an insured Alt-A path or a traditional B bank‑statement program fits your file best.

Documentation You Actually Need

1-minute prep checklist

B-lending dramatically reduces paperwork compared to traditional banks:

Essential Documents:

• 12 months business bank statements
• Business license and registration
• Personal identification and SIN
• Down payment source verification
• Credit authorization

NOT Required:

• Tax returns or Notices of Assessment
• Profit and loss statements
• CPA-prepared financial statements
• Employment verification letters
• T4/T5 slips

Varun Chaudhry: B-Lending vs. Insured Alt-A—Get the Right Fit

30-second credibility check

Varun Chaudhry at Kraft Mortgages Canada Inc. specializes in complex self-employed files that traditional brokers won't touch. He compares B-lender bank‑statement solutions (up to 80% LTV, no NOAs for income) with insured Alt‑A options (up to 90% LTV with NOAs to confirm history and no tax arrears) and recommends the path that fits your tax profile and down payment.

Track Record:

• 15+ years navigating alternative lending markets
• Direct relationships with 12+ B-lenders serving BC plus insurer-approved Alt-A programs (Canada Guaranty, Sagen)
• Successfully structured stated income and bank statement approvals for contractors, consultants, and business owners throughout Burnaby and Surrey

The Kraft Advantage: While big banks operate on rigid computer algorithms, Varun manually structures files to highlight your business strengths—and knows exactly when B-lending vs. insured Alt-A will deliver the best outcome.

Next Steps: Your Approval Strategy

2-minute action plan

Immediate Actions:

1. Compile 12 months of business bank statements showing consistent revenue deposits
2. Check your credit score through free services, aim for 650+ minimum
3. Calculate your down payment capacity including closing costs (budget 12% of purchase price total)

Professional Strategy:
Contact Kraft Mortgages Canada Inc. for a confidential consultation. Varun will review your business cash flow, assess B-lender options, and structure your application for maximum approval odds.

Use our mortgage affordability calculator bc to estimate buying power based on bank statement income before applying.

The Bottom Line

Traditional banks saying "no" doesn't end your homeownership journey: it redirects it. B-lending programs designed for self-employed borrowers in Burnaby recognize that business cash flow matters more than tax-minimized paper income.

The trade-off is real: Higher rates and shorter terms in exchange for approval when traditional lenders won't budge. But for qualified self-employed borrowers, B-lending provides immediate access to homeownership with a path back to traditional rates at renewal.

Ready to explore your options? Contact Varun Chaudhry directly at Kraft Mortgages Canada Inc. for a no-obligation consultation about bank statement mortgage programs. Your business success deserves a mortgage solution that recognizes actual cash flow, not just paper income.