Quick answer
A P&L mortgage is a non-QM first mortgage that calculates your income from a 12- or 24-month profit and loss statement, usually prepared or reviewed by a CPA, enrolled agent or licensed tax preparer, instead of tax returns. Many programs also ask for two or three months of business bank statements that support the P&L. Expect pricing above a conventional loan and a down payment of roughly 15% to 25%, depending on the program.
What is a P&L mortgage?
A P&L mortgage is a first mortgage, for a purchase or a refinance, where the lender works out your income from a profit and loss statement for your business. It is a non-QM loan, which means it sits outside the standard documentation rules used for conventional loans. You still have to show you can repay. The proof is just different.
The appeal is timing. Tax returns look backward, and they are built to keep taxable income low. A current P&L shows what the business is earning now. If revenue has grown, or last year included a big one-time expense, the P&L can tell a better story.
P&L qualifying income calculator
These numbers are an example. Your lender sets the final figure.
Get a P&L Mortgage Quote →Example only. Lenders may adjust for one-time items, owner pay and how long you have been in business. Not a loan offer; all loans subject to credit approval and underwriting.
How lenders use your P&L
Most programs take the net profit on the P&L, apply your ownership percentage, and divide by the number of months it covers. Lenders typically want:
- A P&L covering 12 or 24 months, signed by a CPA, enrolled agent or licensed tax preparer. Some programs accept a borrower-prepared P&L with extra support, often at tighter terms.
- Proof the business exists, such as a business license, a CPA letter or a state filing, usually showing at least two years in business.
- Supporting bank statements. Many lenders ask for two or three recent months and check that deposits roughly line up with the revenue on the P&L.
If the P&L shows far more revenue than the deposits support, expect questions. The two documents should tell the same story.
Typical requirements
| Item | What lenders typically look for |
|---|---|
| Income document | 12- or 24-month P&L prepared or reviewed by a tax professional |
| Time in business | Usually 2 years |
| Supporting statements | Often 2–3 months of business bank statements |
| Down payment / equity | Often 15%–25%, depending on credit and loan size |
| Credit | Varies by program; higher scores get better pricing |
Typical ranges, not a quote. Terms vary by lender, property type, occupancy and loan size.
P&L vs. bank statement loan
Both skip tax returns. The difference is how income is measured. A bank statement mortgage starts from deposits and applies an expense factor. A P&L loan uses your actual reported expenses. If your real margins are better than a typical expense factor assumes, the P&L can show more income. If your books are messy or your margins are thin, bank statements may work better. Compare all three self-employed options in bank statement vs. P&L vs. 1099 loans.
Who it fits
- Business owners whose last tax return shows less than the business earns today.
- Owners with clean books and a CPA or tax preparer who can sign off on the P&L.
- Businesses with high deposits but also high real expenses, where an expense factor would not be fair either way.
FAQ
Can I get a mortgage with just a P&L?
Some non-QM programs qualify you on a 12- or 24-month profit and loss statement instead of tax returns. Most want it prepared or reviewed by a CPA, enrolled agent or licensed tax preparer, and many also ask for two or three months of bank statements.
Who has to prepare the P&L?
Usually a CPA, enrolled agent or licensed tax preparer. Some programs accept a borrower-prepared P&L with more supporting documents, often at tighter terms.
Is a P&L loan better than a bank statement loan?
It depends on your margins. A P&L uses your actual expenses; a bank statement loan applies a standard expense factor to deposits. If your real expenses are lower than the factor assumes, a P&L can show more income.
Are P&L mortgage rates higher?
Usually. P&L loans are non-QM and are typically priced above conventional loans. If your tax returns show enough income, compare a conventional quote too.
Part of the self-employed and non-QM mortgage guide: bank statement, P&L, 1099, asset depletion, DSCR, WVOE, ITIN and foreign national loans.
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