For many business owners, the profit and loss statement tells a much clearer story than a tax return. Your books show real revenue, real expenses, and real income. A P&L loan lets you use that documentation to qualify for a mortgage.
P&L loans are designed for self-employed borrowers who work with a licensed accountant or CPA and can provide a current profit and loss statement that reflects their business income. Instead of averaging two years of tax returns, the lender evaluates your business performance using financial records prepared by a professional.
At Lender Express, we connect self-employed borrowers with lenders who understand how business income works and know how to evaluate it fairly.
WHAT IS A P&L LOAN?
A P&L loan is a Non-QM mortgage that uses a profit and loss statement as the primary income documentation. The P&L is typically prepared by a licensed CPA or accountant and covers the most recent 12 or 24 months of business activity.
The lender uses the net income figure from the P&L to determine your qualifying income. Because the statement is professionally prepared and reflects actual business performance, it can present a more accurate picture of your finances than a tax return that includes substantial deductions.
P&L loans are particularly useful for business owners who have been in operation for at least one to two years and maintain organized financial records.
KEY BENEFITS
- Qualify without submitting tax returns
- Uses a CPA-prepared profit and loss statement
- Available for 12-month or 24-month P&L periods
- Reflects actual business revenue and net income
- Available for purchase and refinance
- Works for sole proprietors, S-corps, partnerships, and LLCs
- Can accommodate borrowers with significant deductions that reduce taxable income
HOW IT WORKS
Here is how a P&L loan works from start to finish.
- Work with your CPA — Your accountant prepares a current profit and loss statement covering 12 or 24 months.
- Lender reviews the P&L — The net income figure is used to calculate your qualifying monthly income.
- Credit and asset review — Your credit score, reserves, and down payment are reviewed alongside the P&L.
- Pre-approval — Based on your income, credit, and assets, you receive a pre-approval amount.
- Underwriting and close — The lender completes underwriting and you close on your home.
Before you apply, use our mortgage calculator to get a realistic sense of your monthly payment at different loan amounts.
WHO THIS LOAN IS BEST FOR
- Business owners who work with a licensed CPA or accountant
- Self-employed borrowers with organized financial records
- Borrowers whose tax returns significantly understate their net income
- S-corp, LLC, partnership, or sole proprietorship owners
- Borrowers who have been self-employed for at least one to two years
- Borrowers with solid credit and adequate reserves
BASIC REQUIREMENTS
These are general guidelines. Requirements vary by lender and borrower profile.
| Documentation | 12 or 24-month P&L prepared by a licensed CPA or accountant |
| Business Type | Sole proprietor, LLC, S-corp, partnership |
| Self-Employment History | Generally 1 to 2 years in the same business |
| Minimum Credit Score | Typically 620 or higher |
| Down Payment | Generally 10% to 20% depending on loan amount and credit |
| Reserves | Several months of mortgage payment reserves typically required |
| Property Types | Primary residence, second home, investment property |