Business License & Formation Documents

Documentation required to verify your business and self-employment status across bank statement, 1099, P&L, and asset depletion programs

All four specialty mortgage programs require proof that you are self-employed and that your business is legitimate and operating. This documentation is separate from income documentation—it answers “does this business exist and do you own it?” rather than “how much do you earn?”

Why Lenders Require This

Unlike W-2 employees whose employers can be verified with a phone call, self-employed borrowers must prove:

• The business is real and operating
• You own or have a stake in the business
• The business has been operating long enough (typically 2 years)

This requirement applies regardless of which program you’re using. A 1099 contractor, a business owner using bank statements, a P&L borrower, and an asset depletion applicant who is self-employed all need to satisfy the same fundamental verification.

Common Documentation Options

Lenders typically require one or more of the following:

Business license — A license issued by your city, county, or state authorizing you to operate. Must be current and show the business name and your name as owner.

Articles of incorporation or organization — Formation documents filed with the state when establishing a corporation or LLC. Shows ownership structure and formation date.

Partnership agreement — For partnerships, the agreement outlining ownership percentages and partner names.

DBA registration — “Doing Business As” or fictitious name registration if operating under a name different from your legal name.

Professional license — For licensed professionals (real estate agents, contractors, CPAs, healthcare workers), your state-issued professional license may suffice.

CPA letter — A letter from your accountant confirming self-employment status, business name, ownership percentage, and that the business is currently operating. Often used when formal business formation documents don’t exist.

What Lenders Look For

Element	Why It Matters
Your name	Confirms you’re the owner
Business name	Matches income documentation
Formation/issue date	Proves length of self-employment
Current status	Business must be active, not dissolved
Ownership percentage	Confirms your stake in the business

How Requirements Vary by Loan Type

Bank Statement Loans

The business verification requirement is standard—lenders want formation documents or a business license showing the entity that’s depositing into the bank accounts being used to qualify. The business name on the license should match the business account name.

1099 Loans

Independent contractors often don’t have a formal business entity. A sole proprietor working as a freelance consultant may have no LLC, no business license, and no DBA. In these cases, acceptable verification often includes:

• A professional license (real estate, healthcare, financial services)
• A CPA letter confirming self-employment status
• Client contracts or letters of engagement showing the nature of the work
• Tax returns showing Schedule C (accepted by some lenders for supplemental verification)

The 1099 forms themselves establish income, but they don’t by themselves prove self-employed status to lender satisfaction—additional verification is still required.

P&L Loans

Business verification requirements are similar to bank statement loans. However, the CPA involvement in a P&L loan naturally extends to self-employment verification—a CPA who has prepared your financials and is signing the P&L statement will typically also provide a letter confirming business ownership and operating status. In practice, the CPA letter and P&L are often submitted together.

Asset Depletion Loans

If you are self-employed, standard business verification applies. However, not all asset depletion borrowers are self-employed—retirees or investors living off portfolio income may have no business to document. For those borrowers, business license requirements simply don’t apply.

If you are self-employed and using asset depletion, expect the same documentation requirements as any other program.

Sole Proprietors

If you operate as a sole proprietor without a formal business entity, you may provide:

• Business license or DBA registration
• Professional license
• CPA letter confirming self-employment
• Two years of tax returns showing Schedule C (some lenders)

Keeping Documents Current

Ensure your business license and registrations are not expired. Lenders will reject expired documentation. If renewal is due soon, renew before applying to avoid delays.