< Back to JVM's Blog

Why “Business Bank Statements” Are a Problem

We frequently get small business owners or professionals (often lawyers) who use a business bank account for both business and personal use.

This is problematic for several reasons. First, as most people know, every large deposit (over $500 or so) has to be paper-trailed and explained. And most business bank accounts have a very large number of deposits consisting of payments from clients and customers.

We had an attorney recently who had only one checking account and a booming law practice. We had no choice but to show the bank statements from her only account, and this exposed hundreds of deposits from hundreds of clients. It took us and her weeks to track down all the paperwork necessary to “paper trail” all those deposits.

The other issue with a business bank account is that draining the account for a purchase can spark concern that a business will end up under-capitalized. This concern then requires a letter from the borrower’s CPA stating the withdrawal of funds will not adversely impact the business. Such letters used to be easy to obtain, but CPAs have become much more leery in recent years and getting such letters from them is often very difficult.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646