Question 1

Does my CPA need special credentials to prepare the P&L?

Accepted Answer

Your CPA must hold an active license and sign the statement. Most lenders verify the CPA's credentials directly through state boards.

Question 2

Can I use a P&L if I've been self-employed less than two years?

Accepted Answer

Most programs require two years of business history. Some lenders accept one year if you worked in the same industry previously as a W-2 employee.

Question 3

How do lenders calculate income from my P&L statement?

Accepted Answer

Lenders average your monthly net profit over the statement period. They add back non-cash expenses like depreciation but subtract owner distributions in some cases.

Question 4

What if my business shows a loss in some months?

Accepted Answer

Occasional losses get averaged into your total income calculation. Consistent monthly losses or declining revenue trends will hurt qualification or stop approval entirely.

Question 5

Are P&L loan rates higher than bank statement loans?

Accepted Answer

Rates vary by borrower profile and market conditions. P&L and bank statement programs price similarly since both are Non-QM products with comparable risk profiles.

Profit & Loss Statement Loans in Industry — Finance for Self-Employed Borrowers