Question 1

Who prepares the P&L for this loan?

Accepted Answer

A licensed CPA must prepare and sign it. DIY statements or bookkeeper-prepared docs are rejected.

Question 2

Can I use one year of P&L statements?

Accepted Answer

Some lenders accept 12 months. Others require 24. A 24-month P&L usually gets you better terms.

Question 3

How is income calculated from a P&L?

Accepted Answer

Lenders use net profit shown on the statement. Higher profit means higher qualifying income.

Question 4

Do P&L loans carry higher rates than conventional?

Accepted Answer

Yes, non-QM products carry higher rates than conventional loans. Rates vary by borrower profile and market conditions.

Question 5

Can I use a P&L loan for a jumbo purchase in Palo Alto?

Accepted Answer

Yes. Several non-QM lenders offer jumbo P&L loans. Your profit documentation needs to support the loan size.

Question 6

What if my tax returns show low income but my P&L shows profit?

Accepted Answer

That gap is exactly why P&L loans exist. They qualify you on business profit, not your tax-optimized net income.

P&L Loans for Self-Employed Buyers in Palo Alto