Choose the option that best fits your documentation situation. Both use your P&L statement as the primary income source, but differ in verification requirements and pricing.
Bank statement must show deposits ≥ 80% of 1/12 of annual net income from P&L
Higher rate due to reduced income verification - no bank statement needed
Calculate your qualification and compare rates between Option 1 and Option 2.
Required: $8000 (80% of monthly income)
Minimum: 15%
Note: This is an estimate only. Actual rates and qualification depend on credit score, property type, reserves, and full underwriting review.
P&L loans use your business's profit and loss statement to determine qualifying income, bypassing the limitations of tax return-based verification.
Have your CPA or tax preparer create a P&L statement covering the most recent 12 months of business activity.
Option 1: Add a bank statement for better rates. Option 2: P&L only for faster, simpler processing.
Lender uses net income from your P&L. For Option 1, bank statement confirms the income is real.
Once income is verified, standard DTI ratios apply. Most programs allow up to 50% DTI.
See how we've helped self-employed borrowers secure financing using P&L statement loans.
Traditional lenders couldn't verify income due to cash-heavy business. Tax returns showed significant write-offs reducing taxable income to $65,000, but actual business performance was much stronger.
Used P&L with bank statement support. P&L showed $145,000 annual net income. Bank statement showed $12,500 in deposits, exceeding the required $9,667 (80% of $12,083 monthly income).
Approved for $650,000 purchase at 7.25% with 20% down. Saved 0.625% on rate compared to P&L-only option.
Bank deposits spread across multiple business accounts made single-statement verification difficult. Needed to consolidate debt and access equity quickly.
Used P&L-only option with CPA-prepared statement showing $185,000 combined annual net income from all entities.
Approved for $425,000 cash-out refinance at 7.875%. Closed in 18 days with simplified documentation.
Income fluctuated seasonally with Q4 being 40% of annual revenue. Traditional lenders wanted 2 years of tax returns showing consistent income.
P&L showed $210,000 annual net income. Most recent bank statement showed $18,200 in deposits, well above the required $14,000 threshold.
Approved for $890,000 purchase at 7.375% with 25% down. Qualified for higher loan amount due to bank statement support.
Everything you need to know about P&L statement loans.
A P&L (Profit & Loss) Statement Loan allows self-employed borrowers to qualify for a mortgage using their business's profit and loss statement instead of traditional tax returns. This is ideal for business owners whose tax returns don't accurately reflect their true earning capacity due to legitimate business deductions.
Option 1 requires a P&L statement plus one supporting bank statement showing deposits of at least 80% of 1/12 of your annual net income. This option offers better interest rates (starting at 7.25%). Option 2 requires only the P&L statement with no bank statement verification, but comes with higher rates (starting at 7.875%) due to reduced income verification.
Take your annual net income from the P&L, divide by 12 to get monthly income, then multiply by 80%. For example, if your P&L shows $120,000 annual net income: $120,000 ÷ 12 = $10,000 monthly income × 80% = $8,000 minimum required deposits on your bank statement.
The P&L statement must be prepared by a licensed CPA (Certified Public Accountant) or a qualified tax preparer. Self-prepared P&L statements are not accepted. The statement should cover the most recent 12-month period and include all business income and expenses.
Use the most recent or upcoming bank statement. The statement should be from the same business account that reflects the income shown on your P&L. If your P&L covers January-December, use your December or January statement.
Option 2 is ideal when your bank deposits don't accurately reflect your business income - for example, if you have a cash-heavy business, receive payments through multiple accounts, or have significant non-deposit income. While rates are higher, the simplified documentation can mean faster approval.
Yes, both options are available for investment properties. However, investment properties typically require higher down payments (20-25%) and may have slightly higher rates compared to primary residences.
Option 1 typically takes 21-30 days from application to closing. Option 2 can be faster (14-21 days) due to reduced documentation requirements. Actual timelines depend on property appraisal, title work, and how quickly you provide required documents.
Important Rate Information
Rates Subject to Change: All interest rates, annual percentage rates (APRs), and loan terms displayed on this website are subject to change without notice based on market conditions and other factors.
Credit Approval Required: All loans are subject to credit approval. Not all applicants will qualify for the rates or terms shown. Your actual rate and terms will depend on your credit profile, income, assets, and other factors.
Not a Commitment to Lend: The information provided is for educational purposes only and does not constitute a loan offer or commitment to lend. Final loan approval and terms are subject to underwriting review.
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