Profit and Loss (P&L) Loan Program

A type of mortgage loan designed for self-employed borrowers who may not have traditional income documentation, such as W-2s or tax returns. Instead, lenders evaluate the borrower’s profit and loss statement (usually prepared by a CPA or tax professional) to determine their income.

Benefits to Clients:

  1. Easier Qualification for Self-Employed Borrowers – Traditional loans require tax returns, which may not reflect the borrower’s actual cash flow due to deductions. A P&L loan focuses on business revenue instead.

  2. No Tax Returns Required – Instead of relying on tax documents, the lender looks at the P&L statement (sometimes combined with bank statements) to determine affordability.

  3. Higher Loan Amounts – Since tax write-offs can lower reported income, a P&L loan allows borrowers to qualify for higher loan amounts based on actual business performance.

  4. Faster Approval Process – With fewer documents required, these loans can often be processed more quickly than conventional loans.

  5. Flexible Use Cases – Many lenders allow P&L loans for primary residences, second homes, and investment properties, making them versatile for different types of borrowers.

  6. Credit Flexibility – Some programs offer more lenient credit score requirements compared to traditional mortgages.
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