The Basics
What Is a P&L Only Loan?
A profit and loss only loan allows self-employed borrowers to qualify for a mortgage using a single document: a profit and loss statement prepared by a licensed CPA or enrolled agent. There are no bank statements to gather, no tax returns to produce, and no W-2s to track down. The CPA's signed P&L is the sole basis for calculating your qualifying income.
This program addresses a specific gap in the Non-QM landscape. Many self-employed borrowers have messy banking — multiple accounts, heavy inter-account transfers, and co-mingled personal and business funds. These banking patterns make bank statement loans difficult because lenders struggle to isolate legitimate business deposits. A P&L only program sidesteps that issue entirely by relying on your accountant's professional attestation of your business revenue and expenses.
The tradeoff is straightforward: P&L programs carry slightly higher rates than bank statement loans because the lender is placing more reliance on a third-party document rather than verifiable bank deposits. But for borrowers whose banking activity doesn't paint a clean picture of their actual earnings, this premium is well worth paying.
620+
Typical min. credit score
10%
Minimum down (primary)
CPA
Licensed preparer required
Income Calculation
How P&L Income Is Calculated
Your CPA or enrolled agent prepares a profit and loss statement covering 12 or 24 months of business activity. The lender uses the net income figure from that statement as your qualifying income. The process is simpler than bank statement underwriting because there are no expense ratios to apply or deposit patterns to analyze.
What the P&L Must Include
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Gross revenue for the reporting period
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Itemized business expenses
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Net income (bottom line)
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CPA or EA license number and signature
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Statement period dates (12 or 24 months)
CPA Requirements
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Must hold an active CPA or EA licenseThe preparer's license will be independently verified by the lender.
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Cannot be a family member or related partyArm's-length relationship between borrower and preparer is mandatory.
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May need to sign a comfort letterSome lenders require the CPA to attest that the P&L is based on actual records they have reviewed.
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P&L only vs. bank statement — when to choose which?
If your bank deposits clearly reflect your business income with minimal transfers and co-mingling, a bank statement loan will likely offer better pricing. If your banking is complicated — multiple accounts, frequent transfers between entities, or heavy cash deposits — a P&L only program produces a cleaner file and faster approval. Bayou Mortgage will evaluate both options and recommend the best fit.
Requirements
P&L Only Loan Requirements
RequirementTypical Standard
Credit Score
620+ (better pricing at 700+)
Income Documentation
CPA-prepared P&L (12 or 24 months)
Self-Employment History
2 years in same business (verified)
Min. Down (Primary)
10% (at 680+ credit)
Min. Down (Investment)
20–25%
Bank Statements Required
No (asset verification only for reserves)
Max Loan Amount
Up to $2.5M+ on some programs
Property Types
Primary, second home, investment
The down payment requirements for P&L loans mirror most other Non-QM income programs. Primary residences start at 10% down with strong credit, while investment properties typically require 20% or more. Your credit score plays a significant role in both rate pricing and maximum loan-to-value ratios.
Best Fit
Who Benefits Most From a P&L Only Loan?
P&L loans are not designed for every self-employed borrower. They solve a specific problem — and understanding whether your situation matches is critical before pursuing this program.
Ideal Candidates
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Business owners with co-mingled accountsMultiple transfers between personal and business accounts make bank statement underwriting complex.
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Cash-heavy businessesSignificant cash deposits can trigger additional scrutiny on bank statement programs.
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Multi-entity operatorsRunning income through several LLCs or DBAs complicates deposit tracking.
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Borrowers who already work with a CPAIf your accountant maintains your books, the P&L is a straightforward document to produce.
May Want a Different Program
→
1099 independent contractors
If you receive 1099s, the 1099 only program may be simpler.→
No existing CPA relationshipFinding a CPA willing to prepare a P&L for a new client specifically for a mortgage can be difficult and expensive.
Common Questions
P&L Only Loan FAQ
Can I prepare the P&L myself? +
No. The profit and loss statement must be prepared, signed, and attested to by a licensed CPA or enrolled agent. Self-prepared financial statements are not accepted. The lender will independently verify that the preparer holds an active license and is not related to you by family or business ownership.
Do I need any bank statements at all? +
Not for income documentation. However, the lender will still need to verify your assets for the down payment, closing costs, and reserves. This typically involves providing recent bank or investment account statements showing sufficient funds — but these statements are not used to calculate your income.
Will the lender contact my CPA directly? +
In most cases, yes. Lenders typically verify the CPA's license status, confirm they prepared the document, and may request a brief comfort letter confirming the P&L is based on records they reviewed. Your CPA should expect to be contacted as part of the verification process.
How far back does the P&L need to cover? +
Most programs require either 12 or 24 months of business activity. A 24-month statement generally produces better pricing because it demonstrates longer income stability. If your business is seasonal, a 24-month statement helps smooth out revenue fluctuations. Your loan officer will confirm which duration works best for your specific scenario.
Are rates higher than bank statement loans? +
Typically, yes. P&L only programs usually carry a modest rate premium — roughly 0.25% to 0.50% above comparable bank statement program pricing. This reflects the additional risk the lender takes by relying on a third-party attestation rather than verifiable bank deposit data. For many borrowers, the premium is worth paying to avoid the complexity of documenting messy banking.
Can I use a P&L loan for an investment property? +
Yes. P&L loans are available for primary residences, second homes, and investment properties. Investment properties require higher down payments (typically 20–25%) and may carry slightly higher rates, consistent with standard Non-QM pricing tiers.
Learn about Non-QM down payment requirements →What if my CPA only has records for 12 months? +
A 12-month P&L is acceptable on most programs. You will still need to demonstrate 2 years of self-employment history through business license records, tax filing evidence, or similar documentation — but the P&L itself only needs to cover the minimum statement period required by the lender.
Ready to See What You Qualify For?
Share your business income details with Bayou Mortgage and we'll determine whether a P&L only program is your best path — or if another Non-QM option fits better.
