A Profit & Loss (P&L) loan is a mortgage program designed for self-employed borrowers and business owners who may not qualify using traditional income documentation. Instead of relying on W-2s or tax returns, lenders use a borrower’s Profit & Loss statement to evaluate income and determine loan eligibility.

Rather than reviewing personal tax filings, lenders analyze the income shown on a business P&L statement—typically prepared by the borrower or their accountant—to assess cash flow and repayment ability. This allows borrowers to qualify based on their actual business performance rather than taxable income.

Because qualification is based on business income, P&L loans are commonly used by entrepreneurs, independent contractors, and self-employed professionals who need a more flexible income verification option for purchasing or refinancing real estate.

Bank Statement loans are ideal for self-employed borrowers who want to qualify based on cash flow rather than traditional income documentation.

Borrowers may qualify if:

1. The borrower is self-employed or a business owner
2. Personal or business bank statements demonstrate consistent income
3. The borrower has acceptable credit history (typically 620+ depending on the program)
4. Deposits support the proposed mortgage payment
5. The borrower meets minimum down payment and reserve requirements

Because personal tax returns are not required in most programs, Bank Statement loans are especially helpful for borrowers with strong cash flow but significant tax write-offs.

Advantages

1. Qualify using bank statement deposits instead of tax returns
2. No W-2s required
3. No personal tax returns required in most programs
4. Available for personal or business bank statements
5. Flexible income calculation options
6. Ideal for self-employed borrowers and independent contractors

To learn more about Bank Statement loan options, please call (866) 649-0179 or request a quote today.