P&L Overview:
What is a P&L Loan?
Documents you'll need
Benefits of P&L Loan
Requirements of P&L
Apply today!
What is a P&L Loan?
A P&L loan is a mortgage that looks at your actual business income instead of just tax returns.
Perfect for self-employed borrowers, freelancers, and business owners who:
Write off a lot (so taxes don’t show true earnings)
Have seasonal or unpredictable income
Get paid in irregular ways (contracts, gigs, etc.)
How It Works:
Lenders analyze 12-24 months of your business’s Profit & Loss statements to determine your true earning capacity. This method provides a more accurate picture of your financial situation than traditional tax documents alone.
The Loan That Looks Beyond Your Tax Return
These loans are designed specifically for entrepreneurs, freelancers, and small business owners whose healthy revenues get overshadowed by tax strategies. By using your profit and loss statements instead of tax returns, lenders can see the true financial picture of your business. Whether you’re looking to purchase property, refinance existing loans, or secure working capital, a P&L loan recognizes your real income when traditional financing options might not.
It’s an ideal solution for service providers, contractors, and business owners who know their earning power exceeds what shows up on paper. Instead of being limited by tax filings, you can qualify based on your business’s actual performance.
Benefits of P&L Loan
Alternative Income Documentation
P&L loans allow you to qualify for a mortgage without W-2s or traditional tax returns. Instead, lenders use your profit and loss statements, often alongside bank statements, to verify your income.
Ideal for Self-Employed and 1099 Workers
Whether you’re a freelancer, gig worker, or small business owner, a self-employed mortgage loan like this gives you a way to leverage your real income—even if it’s not fully shown on your tax returns due to deductions.
Leverage Real Business Growth
If your business is growing and profitable, a P&L mortgage loan lets you qualify based on current income, even if your recent tax returns don’t reflect it yet.
Flexible Income Verification
Unlike conventional mortgages, P&L loans offer flexible underwriting. Lenders assess your business’s financial performance, which is especially helpful if your income fluctuates or if your tax strategy reduces your taxable income.
Faster Loan Approval Process
Because fewer documents are required—typically a 12–24 month P&L statement—the approval process can be faster than a traditional mortgage.
6 Key Requirements for a P&L Loan
1. P&L Statements
Your Profit and Loss (P&L) Statements should cover the last 12–24 months, and signed by a licensed CPA or tax professional. These documents should clearly show consistent income and steady cash flow, providing a reliable snapshot of your financial situation.
2. Business Bank Statements
Lenders will require business bank statements to verify the income you report in your P&L. These statements help confirm your cash flow consistency and give lenders a clearer picture of your financial stability.
3. Credit Score
Your credit score is an important factor in the approval process. Most lenders require a minimum score of 620–660 or higher, depending on the loan program. A higher credit score can help secure better terms and interest rates.
4. Down Payment / Equity
For purchase loans, lenders typically require a 20–25% down payment. If you’re refinancing, you’ll need sufficient equity in the property to qualify. Be prepared to make a significant upfront investment to proceed.
5. Verification
You’ll need at least two years of self-employment or business ownership under your belt to qualify. To prove it, just show things like your business license, tax records (think Schedule C or EIN), or any official docs that confirm you’ve been running things solo or as a company.
6. Property Type & Purpose
P&L loans are intended for investment or business-use properties, so the property must not be owner-occupied. Lenders generally do not approve loans for primary residences under this program.
The Documents you will need:
The Documents
you will need:
Unexpired Proof of Identification
Drivers License, Passport, etc.
Certified Profit Loss Statement
Prepared by CPA and should show gross income, expenses, and net income
Entity Docs
Articles of Incorporation, Operating Agreement, Tax Identification Number, Certificate of Good Standing
Business Banks Statements
Usually 12–24 months of business bank statements to support the income shown on the profit and loss statement.
Signed Borrower Statement/Affidavit
Some lenders require a signed attestation that the income provided is true and accurate
Is a P&L Loan Right for You?
A P&L loan can be an excellent fit for investors who:
Don’t show strong income on tax returns but have solid business cash flow
Are self-employed or own multiple businesses
Prefer using profit & loss statements over W-2s or pay stubs
Need a flexible mortgage solution tailored to their income structure
Take the Next Step
Ready to leverage the power of a P&L loan to qualify for a mortgage without traditional tax returns? Contact us today to learn how this flexible financing solution can help self-employed individuals and business owners achieve their real estate goals. Let’s turn your business income into homeownership—one step at a time!