P&L
(Profit & Loss Statement)

HOME LOANS

A Profit and Loss (P&L) loan is a type of mortgage designed for self-employed borrowers who may not show consistent income on their tax returns. Instead of W-2s or tax filings, lenders evaluate your business’s P&L statements—usually prepared by a CPA—to verify income for mortgage qualification.

P&L mortgage loans are ideal for self-employed professionals, gig workers, 1099 earners, and small business owners who have been in business for at least 12–24 months. Lenders typically require a CPA-prepared profit and loss statement and solid credit history.

Lenders use the net income from your year-to-date or full-year P&L statement, often averaged over 12 or 24 months, to determine your qualifying income. Unlike traditional loans, no tax return documentation is required.

No, P&L mortgage loans do not require tax returns. This makes them a strong alternative for borrowers who write off significant expenses or whose tax documents don’t reflect their true earning power.

You’ll typically need:

1. CPA-prepared Profit & Loss statement (year-to-date or prior full year)
2. 3–6 months of business bank statements
3. Proof of self-employment (business license, website, etc.)
4. Valid photo ID and credit authorization

Both serve self-employed borrowers, but bank statement loans use actual bank deposits to determine income, while P&L loans rely on a summarized profit and loss report. P&L loans are often faster to process and require fewer documents.

Absolutely. Many P&L loan programs can be used for purchasing or refinancing primary residences, second homes, or investment properties—especially under non-QM lending guidelines.

Loan amounts typically range from $100,000 to $3 million. Your exact limit will depend on your credit profile, property type, down payment, and the strength of your profit and loss statement.

Most lenders prefer or require a CPA-prepared P&L for credibility and underwriting accuracy. However, some programs accept self-prepared statements if supported by strong bank statements and other proof of income.

Yes, self-employed homeowners can use a P&L mortgage loan to refinance their home, even without traditional tax documents. As long as your profit and loss statement supports sufficient income, you can qualify for a rate-and-term refinance.

Absolutely. Many P&L loan programs allow for cash-out refinancing, enabling self-employed borrowers to tap into home equity for business growth, debt consolidation, or large expenses—without needing tax returns.

Most lenders require at least 20–25% equity in the property for a cash-out refinance using a P&L loan. The exact loan-to-value (LTV) requirement may vary based on your credit and property type.