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Profit & Loss Statement Loans in Commerce
Commerce sits in LA County's industrial core where self-employed borrowers run distribution, logistics, and manufacturing businesses. Traditional mortgage underwriting penalizes these earners with tax write-offs that reduce reported income.
P&L loans let you qualify using current business income instead of last year's tax returns. Most Commerce borrowers using this program operate LLCs or S-corps with significant deductions that mask actual cash flow.
This loan works when your business shows strong profitability on paper but your tax returns tell a different story. Lenders review 12-24 months of CPA-prepared statements instead of Schedule C forms.
You need a CPA or licensed tax professional to prepare your profit and loss statements. Lenders won't accept self-prepared documents even if your bookkeeping is flawless.
Credit scores start at 620 for most programs, though 680+ gets better pricing. Down payments range from 10-20% depending on property type and loan amount.
Your business must show at least 12 months of operating history. Some lenders require 24 months, especially for higher loan amounts or riskier property types.
Debt-to-income ratios cap at 50% calculated from your P&L net income. Lenders add back depreciation and one-time expenses to calculate qualifying income.
P&L programs live exclusively in the non-QM space. No conventional or government lender will accept profit and loss statements instead of tax returns.
We work with 15-20 wholesale lenders offering these programs with different overlays. Some accept single-member LLCs, others require multi-year business history, and pricing varies by 1-2% between lenders.
Rates typically run 1-2.5% above conventional mortgages. Expect 7.5-9% in current market conditions depending on credit profile and down payment.
Most lenders price these loans through risk-based tiers. A 740 credit score with 25% down gets dramatically better terms than 640 credit with 15% down.
Your CPA's formatting matters more than borrowers expect. Lenders reject statements that don't follow standard P&L structure or mix personal and business expenses.
I've seen deals die because CPAs wrote narrative explanations instead of line-item statements. Get your accountant on the phone with us before they prepare documents.
Borrowers switching from bank statement to P&L programs usually do it for better pricing. P&L loans typically cost 0.25-0.5% less when your financials show clean profit margins.
Commerce buyers often combine this with DSCR loans for investment properties. Use P&L for your primary residence, DSCR for rentals, and keep each approval process separate.
Bank statement loans are your main alternative, using 12-24 months of business deposits instead of P&L statements. They work when you don't have a CPA or your business is too new for formal financials.
1099 loans fit contractors who receive most income as 1099 payments. They're simpler than P&L programs but don't work when you operate through an LLC or S-corp.
Asset depletion loans ignore income entirely and qualify you based on liquid assets. That works for Commerce business owners who've built wealth but show minimal taxable income.
DSCR loans are strictly for investment properties. They use rental income instead of personal income, so your P&L statements don't matter.
Commerce's industrial zoning limits residential inventory. Most P&L borrowers here buy in adjacent areas like Montebello, East LA, or Bell Gardens where housing stock matches business owner budgets.
Commercial property owners in Commerce sometimes cross-collateralize deals. Your warehouse shouldn't affect your home loan, but tell us about business real estate during pre-approval.
LA County transfer taxes add to closing costs. Commerce itself has minimal city-level fees, but county charges apply to all transactions regardless of loan type.
Appraisals in Commerce come back faster than most LA County cities. The area's clear comp data and commercial focus means residential appraisers don't struggle with valuation.
No, all lenders require 12-24 months of business history. Consider bank statement loans if you have deposit history but minimal operating time.
Your CPA needs an active license and must sign the statements. Enrolled agents and licensed tax preparers also qualify as acceptable preparers.
Lenders average income across all periods reviewed. One weak quarter won't kill your deal if overall trend shows profitability and sufficient income.
Yes, most lenders add back depreciation, amortization, and non-recurring expenses. Your underwriter determines which add-backs apply to your specific P&L.
Expect 1-2.5% higher rates than conventional mortgages. The spread narrows with stronger credit scores and larger down payments above 25%.
Yes, underwriters verify business registration, bank accounts, and may request tax transcripts. They're confirming business existence, not reported tax income.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.