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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.

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Credit and Financial Requirements

P&L loan credit and reserve requirements are similar to other self-employed mortgage programs:

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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.