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:
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.
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.
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.
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.
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.
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.
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.
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.
Drivers License, Passport, etc.
To show enough funds for down payment, closing costs and reserves.
For primary residence (if applicable)
Articles of Incorporation, Operating Agreement, Tax Identification Number, Certificate of Good Standing
A recent quote for the subject property.
A P&L loan can be an excellent fit for investors who:
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!
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