Question 1

Can I use my business accountant instead of a CPA for P&L preparation?

Accepted Answer

Most lenders specifically require CPA-prepared statements. Bookkeepers or non-certified accountants typically don't meet underwriting standards, even if they handle your regular business accounting.

Question 2

How far back do my P&L statements need to cover?

Accepted Answer

Most programs require one to two years of statements. Two years of consistent income strengthens applications, though some lenders accept 12-month statements for established businesses.

Question 3

What if my P&L shows seasonal income fluctuations?

Accepted Answer

Lenders understand seasonal businesses and typically average your income across the documented period. Your CPA should note seasonal patterns in the financial statement preparation.

Question 4

Do P&L loans work for brand new businesses?

Accepted Answer

Most programs require at least one year of business history. New ventures typically need to establish income patterns before qualifying for P&L statement financing.

Question 5

Are interest rates higher than conventional mortgages?

Accepted Answer

P&L loans typically carry rates 1-3% above conventional programs. Rates vary by borrower profile and market conditions, with stronger credit and larger down payments earning better pricing.

Profit & Loss Statement Loans for Redwood City's Self-Employed Professionals