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P&L loans are available to self-employed borrowers who can provide a CPA-prepared profit and loss statement covering the required period. The core requirements are self-employment, an established business with documentable financials, and a CPA relationship.

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Who This Loan Is Designed For

P&L loans work best for business owners whose financial picture is accurately captured by formal accounting:
  • Business owners with a CPA who maintains monthly or quarterly financials
  • Professionals with lower overhead than their industry’s default expense factors imply
  • Borrowers whose bank deposits include non-income items (pass-throughs, reimbursements, client retainers paid on behalf of third parties)
  • Anyone whose P&L net profit is higher than what bank statement calculations would produce

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Self-Employment Requirements

The same self-employment standards that apply to bank statement loans apply here:
  • Typically two years of self-employment history (some lenders accept one year with compensating factors)
  • Documented business existence: business license, formation documents, or CPA letter
  • Ownership stake verified (usually 25%+ ownership triggers self-employment treatment)

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The CPA Requirement

Unlike bank statement or 1099 loans, a P&L loan requires active CPA involvement. You’ll need a licensed CPA who:
  • Has prepared financials for your business for at least the period being documented
  • Is willing to prepare and sign a P&L statement meeting the lender’s format requirements
  • Can verify their CPA license and provide their PTIN (Preparer Tax Identification Number)
Self-prepared P&Ls are not accepted for P&L loan programs. Lenders require the third-party credibility that a licensed accountant provides.

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Business History and Stability

Lenders want to see a business that has operated consistently over the qualifying period. Signs of instability—a declining revenue trend, a P&L that shows losses in the prior year, or a business less than 12 months old—raise underwriting concerns.
FactorWhat Lenders Look For
Revenue trendStable or increasing
Net profitPositive across the full period
Business age2 years preferred
CPA relationshipOngoing, not newly established

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Credit and Financial Requirements

P&L loan credit and reserve requirements are similar to other self-employed mortgage programs:
RequirementTypical Range
Credit score620-700 minimum
Down payment10-20% minimum
DTI ratioUp to 50%
Reserves6-12 months PITIA

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Who Does Not Qualify

  • Borrowers without a CPA — Self-prepared financials are not acceptable
  • Newly established businesses — Insufficient history to prepare a meaningful P&L
  • Businesses with losses — A P&L showing a net loss disqualifies rather than qualifies
  • W-2 employees — No self-employment income to document

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Bank Statements as Supplemental Verification

Many lenders who offer P&L programs also require 2-3 months of bank statements to verify that deposits are consistent with the revenue shown on the P&L. The statements aren’t used to calculate income—that comes from the P&L—but they confirm the financials are grounded in reality.