Question 1

Does my CPA need to be licensed to prepare the P&L?

Accepted Answer

Yes. Lenders require a CPA or licensed tax professional to sign the statement. An in-house bookkeeper won't cut it.

Question 2

Can I use a P&L loan to buy in Clearlake with 10% down?

Accepted Answer

Some lenders allow 10% down on P&L loans. Expect stricter credit and reserve requirements at that down payment level.

Question 3

How is income calculated from my P&L?

Accepted Answer

Lenders typically use your net profit, sometimes averaged over 12 or 24 months. Each lender has its own formula.

Question 4

Are P&L loan rates higher than conventional rates?

Accepted Answer

Yes. Non-QM products carry a rate premium over conventional loans. Rates vary by borrower profile and market conditions.

Question 5

What if my business is only one year old?

Accepted Answer

Most P&L lenders want two years of self-employment history. Some allow 12 months with strong financials and reserves.

Question 6

Can I refinance later into a conventional loan?

Accepted Answer

Yes. Many borrowers use a P&L loan to purchase, then refinance into conventional once two years of tax returns are available.

P&L Statement Loans for Self-Employed Buyers in Clearlake