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Torres & Co. Lending > Non-QM Loan Solutions > P&L (Profit & Loss Statement) Loans

P&L (Profit & Loss Statement) Loans

P&L (Profit & Loss Statement) Loans

A P&L Loan (Profit & Loss Statement Loan) is a Non-QM mortgage program designed for self-employed borrowers who do not have traditional income documentation such as W-2s or pay stubs. Instead, lenders qualify the borrower based on a Profit & Loss Statement prepared by an accountant or CPA.

What Is a P&L Loan?

Instead of requiring full tax returns (which often show reduced income due to write-offs), lenders use a CPA-prepared Profit & Loss Statement to determine qualifying income. This allows self-employed individuals to qualify using their business’s real income flow.

How It Works

  • Eligibility: Self-employed borrowers (sole proprietors, LLC members, partners, business owners).
  • Loan Amounts: Typically $100K – $3M+.
  • Down Payment: Usually 10%–20%.
  • Credit Score Requirement: 620–660+ depending on lender.
  • Documentation:
    • Profit & Loss Statement for the most recent 12–24 months.
    • Prepared and signed by a licensed CPA or accountant.
  • Property Types: Primary, second homes, and some investment properties.
  • Reserves: Usually 3–6 months of reserves required.

Benefits

  • Qualify without tax returns or pay stubs.
  • Perfect for self-employed borrowers with large tax deductions.
  • Faster and simpler documentation than bank statement loans in some cases.
  • Large loan amounts available.

Fun Facts & Insider Details

  • Alternative Income Verification: P&L loans were developed to help small business owners qualify without overstated deductions holding them back.
  • Flexibility: Some lenders allow P&L statements supported by bank statements for added credibility.
  • CPA Requirement: The statement must usually be prepared by a licensed CPA, not self-prepared.
  • Growing Popularity: As entrepreneurship rises, P&L loans are becoming more common in Non-QM lending.

Who Is the Best Candidate?

  • Self-employed borrowers with strong cash flow but tax write-offs.
  • Business owners who prefer not to provide full tax returns.
  • Borrowers seeking a faster qualification process than bank statement loans.

FAQs

  • No. Most lenders require a licensed CPA or accountant to prepare and sign it.

  • Usually 12–24 months, depending on the lender.

  • It depends. Some borrowers qualify more easily with bank statements, others with a CPA-prepared P&L.

Next Step

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⚖️ Disclaimer: P&L loans are non-qualified mortgages. Loan approval depends on assets, reserves, property type, and lender guidelines.

Torres & Co. LendingP&L (Profit & Loss Statement) Loans