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Whittier's business community includes independent contractors, consultants, and small business owners who write off expenses aggressively. Traditional lenders reject these borrowers because their tax returns show minimal taxable income.
P&L statement loans let you qualify using a CPA-prepared profit and loss statement instead of tax returns. We see this work for borrowers whose actual business income exceeds what appears on their 1040.
You need a licensed CPA to prepare your P&L statement covering the most recent 12-24 months. Lenders won't accept statements from unlicensed bookkeepers or self-prepared documents.
Most lenders want 620+ credit and 10-20% down. Some allow 600 credit with 25% down. You must show self-employment history of at least two years in the same industry.
About 30 of our 200+ wholesale lenders offer P&L programs. Rate spreads run 0.50-2.00% above conventional depending on credit and down payment.
Some lenders accept quarterly P&L statements. Others require year-to-date plus prior year. A few will blend P&L with partial tax returns if you've had one strong year followed by write-offs.
We see P&L loans work best for borrowers earning $150K+ with clean credit who simply can't document income traditionally. The CPA letter carries weight but lenders still calculate debt-to-income ratios conservatively.
If your business shows losses or break-even on the P&L, this loan won't work. Consider bank statement loans instead—they show actual deposits without requiring profitability on paper.
Bank statement loans review 12-24 months of deposits and apply a percentage as qualifying income. P&L loans use your CPA's calculation of net profit. Bank statements often qualify higher amounts for deposit-heavy businesses.
1099 loans work if you receive contractor income but don't have business expenses to write off. Asset depletion fits borrowers with significant liquid assets but unpredictable income.
Whittier's mix of established neighborhoods and commercial corridors means we see P&L loans for both primary residences and investment properties. DSCR loans work better for pure investment plays with rental income.
Los Angeles County has high property values. Many Whittier borrowers combine P&L income verification with jumbo loan amounts. Make sure your CPA shows enough net profit to support the debt ratio on higher purchase prices.
No. Lenders require a licensed CPA. Enrolled agents and unlicensed bookkeepers don't meet underwriting standards for this program.
That's the exact scenario P&L loans solve. The CPA statement reflects actual profitability before tax strategies that create paper losses.
Lenders typically use net profit after expenses. Some allow add-backs for depreciation and one-time costs, but your CPA must justify those adjustments.
Most carry 2-3 year prepayment penalties typical of non-QM loans. A few lenders offer penalty-free options at higher rates.
Yes. Cash-out refinances work the same as purchases. Rate-and-term refinances often get better pricing than cash-out transactions.
Profit & Loss Statement Loans in Whittier