P&L loans: qualify with a profit and loss statement
If your books are clean and your CPA knows your business, a profit and loss statement mortgage lets you qualify on the P&L they prepare, instead of the taxable income on last year's return.
Is this you?
- You run an established business with organized books
- You work with a CPA, enrolled agent, or licensed tax preparer who can sign a P&L
- Your current profit is stronger than your most recent tax return shows
- You'd rather not hand over two years of business and personal returns
How qualifying works
Your CPA or licensed tax preparer prepares (and usually signs) a profit and loss statement covering the most recent 12 or 24 months.
The lender uses the net income on that P&L as your qualifying income, often after confirming the preparer's license and your time in business.
Some lenders also ask for a few months of bank statements to confirm the revenue on the P&L is real.
Your monthly net from the P&L feeds the DTI calculation like any other income.
Illustration only. Lenders set their own P&L requirements, may verify with bank statements, and decide qualifying income after full underwriting.
Not sure this is the right program?We'll compare it against the others on your actual numbers.
Check my optionsWhat you'll typically need
- A 12 or 24 month P&L prepared by a CPA, EA, or licensed tax preparer
- The preparer's license or PTIN information, plus a letter confirming your business
- Two to three months of business bank statements (many lenders ask)
- Proof of time in business, such as an entity filing or business license
- Photo ID and asset statements for funds to close and reserves
Typical guidelines
Every lender sets its own rules. These are common patterns, not promises, and they change. We match your file to the lender whose guidelines fit it best.
- Preparer: usually must be a CPA, EA, or licensed tax preparer, not you
- Time in business: about two years is typical
- Credit: many programs start around 620 to 660
- Verification: some lenders compare the P&L to recent deposits
- DTI: some lenders allow up to around 50% with compensating factors
Who it fits (and who it doesn't)
Usually a good fit
- Established businesses with a CPA relationship
- Owners whose profit has grown since the last tax return
- Borrowers who want the lightest documentation path
Maybe not the best fit
- Self-prepared books with no licensed preparer
- Businesses less than about two years old
- Revenue that doesn't show up in your bank deposits
P&L Loans: common questions
What is a P&L loan?
A P&L loan is a non-QM mortgage that uses a profit and loss statement, prepared by a CPA or licensed tax preparer, to calculate your income. It's designed for established business owners whose tax returns understate what the business earns.
Can I prepare my own P&L for a mortgage?
For a P&L-only program, lenders usually require the statement to be prepared or signed by a CPA, enrolled agent, or licensed tax preparer. A self-prepared P&L may still be useful alongside a bank statement loan.
Do I need bank statements with a P&L loan?
Some lenders accept the P&L alone. Others ask for two to three months of business statements to confirm the revenue is consistent with the P&L. We'll tell you which lenders fit your preference.
Is a P&L loan the same as a bank statement loan?
No. A bank statement loan calculates income from your deposits. A P&L loan uses the net income your CPA reports. Some business owners qualify better on one than the other, so we often run both.
P&L Loans are non-QM programs, not available in all states, and subject to credit approval, income and asset verification, and appraisal. Guidelines shown are typical illustrations and vary by lender. This is not a commitment to lend. Matador Lending, NMLS #2072896. Equal Housing Opportunity.
Guides for this program
How a P&L mortgage works for self-employed business owners
A P&L mortgage uses a CPA-prepared profit and loss statement to show your income. Here is how lenders review it and who the program fits best.
Getting a mortgage for LLC and S corp owners
Your business structure changes how a lender reads your income. Here is what LLC and S corp owners should know before applying for a home loan.
How lenders calculate self-employed income, method by method
Tax returns, bank statements, 1099s, a P&L, or rental cash flow. Here is how lenders turn each one into a qualifying income number.
Find out what you qualify for in about 60 seconds
No tax returns. No credit pull to start. Just a straight answer from a broker who works for you.
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