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South Gate self-employed borrowers face a common problem. Your tax returns show write-offs that tank your qualifying income.
P&L statement loans fix this by using 12-24 months of CPA-prepared profit and loss statements. You qualify on actual business revenue, not tax strategy.
This matters in South Gate where small business owners—contractors, truckers, shop owners—often write off expenses aggressively. Traditional underwriting penalizes you for smart tax planning.
You need a licensed CPA to prepare your P&L covering 12-24 months of business activity. The CPA can't be you or a family member.
Lenders want 620+ credit and 10-20% down depending on loan amount. You'll need two years of self-employment in the same industry.
Business bank statements backing up the P&L strengthen your file. Some lenders request them, others don't.
About 30 of our 200+ lenders offer P&L programs. Guidelines vary wildly on CPA requirements and documentation depth.
Some accept quarterly P&Ls. Others want monthly breakdowns. A few allow unaudited statements if your CPA signs off.
Rate spreads run 1-2% above conventional. Expect 7.5-9% in current markets. Borrowers with 740+ credit and 25% down get best pricing.
Half our P&L deals come from borrowers who tried bank statement loans first. P&Ls often show stronger income when business expenses run through separate accounts.
Get your CPA involved early. A poorly formatted P&L kills deals. We've seen lenders reject statements missing depreciation schedules or COGS breakdowns.
South Gate investors buying mixed-use properties love these. You can use business income to qualify even if the property isn't generating rental income yet.
Bank statement loans are easier—just 12-24 months of statements, no CPA needed. But they average deposits, which penalizes seasonal businesses.
P&L loans let you show annualized income even if recent months were slow. That's huge for South Gate businesses with lumpy cash flow.
1099 loans work if you have clean contractor income. But most self-employed borrowers mix 1099 and business revenue. P&L captures both.
South Gate has thousands of small business owners—trucking, construction, retail, food service. Most write off vehicle expenses, equipment, and home office costs.
Those write-offs destroy W-2-style qualifying income. A contractor grossing $180k might show $60k taxable income after legitimate deductions.
P&L underwriting ignores tax strategy. You qualify on gross profit minus direct costs. South Gate borrowers typically gain $30-80k in qualifying income switching from tax returns to P&L.
Your CPA needs an active license in any US state. They can't be related to you or employed by your business. Most lenders verify the license before closing.
Yes. Most lenders allow 1-4 unit investment properties. You'll need 20-25% down and the property can't be your primary income source.
A few lenders accept 12 months of P&L history if you have 5+ years in the same industry. Rates run higher and down payment increases to 25%.
Plan for 25-35 days from application to closing. CPA statement review adds a week versus bank statement programs. Rush closings rarely work with P&L loans.
Most lenders want two years of returns for credit review only. They don't calculate income from them. A few programs skip returns entirely with 25% down.
Profit & Loss Statement Loans in South Gate