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P&L LOAN (PROFIT & LOSS STATEMENT)
How Does P&L Loan Work?
Instead of using tax returns the borrower can request their licensed tax preparer for a 1-to-2-year (P&L) Profit and Loss statement signed and dated on letterhead. This will allow the mortgage company to use the P&L vs collecting and reviewing your last two years of income tax returns. Many business owners have an advantage of using the tax code to write off expenses thus reducing the over all taxable income.
However, this can hurt the borrower’s ability to qualify for their dream home or investment. That is why the P&L loan program came out to help self-employed borrowers qualify using an accurate picture of the borrower’s true income.
Min 620 FICO | Max 90 LTV, loan
to value, 720 score required
- 30, 20 or 15-year fixed options available
- 5/6 or 7/6 Arm’s available
- Interest only loan products available
- Investment properties up to 85% LTV
- Primary, Second home or Investment
- Purchase or cash out refinance
- Max DTI 50%
- 2-Months Business statements or as many as you need
- CPA or Tax Preparer P&L Covering 12 or 24 Consecutive Months
- Non-Warrantable condos allowed
- May use > 2 months of statements to achieve a higher monthly average of income
Streamlined Financing for Business Owners
Profit & Loss (P&L) Loan Program
A P&L Loan is designed for self-employed borrowers who want to qualify for a mortgage using their business performance rather than traditional tax returns. Instead of reviewing W-2s or full tax filings, lenders use a professionally prepared Profit & Loss statement to determine your income. This program is ideal for business owners whose taxable income appears lower due to write-offs but whose actual cash flow is strong.
A P&L Loan Program allows lenders to evaluate your income through a detailed Profit & Loss statement, making it ideal for self-employed borrowers with complex finances. Instead of relying on tax returns that often show reduced income due to deductions, this loan highlights the true financial strength of your business. It offers a streamlined approval process and greater flexibility, especially for business owners who want a mortgage solution that aligns with their actual earning capacity.
Qualify Using Real Business Performance
Flexible Qualification for Business Owners
With a P&L Loan, your business’s financial health becomes the key factor in qualifying. A CPA-prepared or accountant-prepared P&L statement can be used to verify income, making the process faster and more flexible than standard documentation loans. This program works well for entrepreneurs, LLC owners, sole proprietors, and independent contractors who need a mortgage that reflects their true earning power—not just what shows on paper after deductions.
A P&L Loan gives business owners the freedom to qualify based on real revenue trends rather than complex tax filings. By focusing on current business performance, lenders can approve borrowers who show strong cash flow, even if traditional documents don’t fully reflect their earnings. This makes it an excellent option for growing businesses and self-employed individuals who want a smoother, more accurate path to home financing.
Top 10 FAQ’s for P&L Loan
A P&L Loan allows self-employed borrowers to qualify for a mortgage using a Profit & Loss statement instead of tax returns, W-2s, or pay stubs.
Business owners, freelancers, independent contractors, sole proprietors, and LLC owners who can provide a verified P&L statement are eligible.
Yes. Most lenders require the P&L to be prepared and signed by a CPA or licensed accountant for accuracy and verification.
No. The P&L program is designed specifically for borrowers who prefer not to use tax returns due to deductions or complex financials.
Lenders review the net income shown in your P&L, along with business expenses and cash flow, to determine your qualifying monthly income.
Most programs accept scores starting around 600–620, depending on the lender and loan amount.
Yes. P&L loans can be used for purchases, rate-and-term refinances, and cash-out refinances.
This loan can be used for primary residences, second homes, investment properties, and even some non-warrantable condos.
Your Profit & Loss statement typically must cover the most recent 12 or 24 months, along with a year-to-date summary.
For many self-employed borrowers, yes. A P&L Loan provides flexibility because it focuses on real business performance instead of taxable income, which often appears lower due to deductions.
