P&L Loans (Profit & Loss)
Income verification using profit and loss statements prepared by your CPA
Is This Loan Program Right For You?
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What is a P&L Loan?
A P&L (Profit & Loss) loan is a mortgage program that allows self-employed borrowers to qualify using a CPA-prepared profit and loss statement rather than full tax returns. This provides a streamlined alternative documentation method while still maintaining professional income verification.
The CPA prepares a profit and loss statement covering a specific period (typically 12-24 months), signs it, and provides their professional certification. This document serves as proof of your business income and financial stability.
Key Benefits
Requirements
Who Should Consider This?
- • Self-employed professionals
- • Business owners with established companies
- • Those who work with a CPA regularly
- • Borrowers with profitable businesses
- • Those who prefer not to submit full tax returns
- • Entrepreneurs with strong current year earnings
- • High-income self-employed individuals
Important to Know
CPA Certification: The P&L statement must be prepared by a licensed CPA who will sign the document and provide their credentials. The CPA may need to be available for verification by the lender.
Income Calculation: Lenders will calculate your qualifying income based on the net profit shown on the P&L statement, typically averaging 12-24 months of data.
Additional Documentation: While full tax returns aren't required, lenders may still request business bank statements, business licenses, and other supporting documents to verify business existence and activity.
Interest Rates: P&L loans typically offer competitive rates, often better than bank statement loans, since they involve professional CPA verification.