1-Year or 2-Year Profit & Loss (P&L) Loan

A 1-Year or 2-Year Profit & Loss (P&L) Loan is a mortgage option designed for self-employed borrowers who may not have traditional income documentation, such as W-2s or pay stubs. Instead of tax returns, these loans allow borrowers to qualify using a Profit & Loss (P&L) statement prepared by a licensed CPA, enrolled agent, or tax preparer.

This type of loan is ideal for business owners, freelancers, independent contractors, and self-employed professionals who want to buy or refinance a home.

Who Can Benefit from a P&L Loan?

✅ Self-Employed Borrowers – Business owners, freelancers, gig workers, and contractors.
✅ Entrepreneurs with High Business Write-Offs – Those whose tax returns show low net income due to deductions.
✅ 1099 Earners – Individuals who don’t receive W-2s but earn income through contracts or commissions.
✅ Small Business Owners – Those with at least 12 to 24 months of business income.

Key Features of 1-Year & 2-Year P&L Loans

✔ No Tax Returns Required – Borrowers qualify using a P&L statement instead of full tax returns.
✔ Flexible Qualification – Can be based on one (1) or two (2) years of business income.
✔ Available for Home Purchase & Refinance – Can be used for primary residences, second homes, or investment properties.
✔ Higher Loan Amounts – Some lenders offer loan amounts up to $3 million.
✔ Fixed & Adjustable-Rate Options – Available with competitive interest rates.
✔ Faster Approval Process – Less documentation speeds up underwriting.

Typical Requirements for a P&L Loan

📌 1-Year or 2-Year P&L Statement – Must be prepared and signed by a CPA, enrolled agent, or tax preparer.
📌 Credit Score – Typically 620+, but higher scores get better rates.
📌 Business Bank Statements – Some lenders may require 3-12 months of business bank statements to support the P&L.
📌 Debt-to-Income (DTI) Ratio – Generally below 50% for approval.
📌 Down Payment – Typically 10-25% depending on credit and lender guidelines.
📌 Business Operation – Must be self-employed for at least 12-24 months.