1Y + 2Y P&L

A P&L statement (profit and loss statement) is a financial document that summarizes a business’s revenue, expenses, and net income over a set period — typically one or two years for mortgage qualification purposes. For a P&L loan, the statement must be prepared by a Licensed CPA, a CTEC-registered tax preparer, or an IRS Enrolled Agent. Lenders use the net income shown on the P&L to calculate your client’s monthly qualifying income, instead of relying on tax returns or W-2s. Because many self-employed borrowers write down their taxable income through legitimate deductions, a P&L statement often reflects the true earning power of the business more accurately than a tax return does.

P&L loan is available for:

• Businesses/self-employed workers who received income exclusively from cash and may not keep perfect records of their transactions.
• Businesses/self-employed workers with seasonal income, and/or make intermittent deposits that do not follow a regular predictable pattern on a weekly or monthly basis.
• Businesses/self-employed workers that have been in business for more than 2 years.

Self-employed borrowers qualify by submitting a 1-year or 2-year P&L statement prepared by a Licensed CPA, CTEC-registered preparer, or IRS Enrolled Agent. AD Mortgage calculates monthly qualifying income directly from the net income on the statement — no tax returns or transcripts required. Up to 70% LTV, no bank statements are needed to support the P&L; above 70% LTV, two months of business bank statements are required, with an income support tolerance of 25%. The borrower must own at least 25% of the business, using a pro-rated portion of qualifying income.

With a minimum FICO of 660, up to 75% CLTV, and a FICO of 680, up to 80% CLTV, loan amounts to $2.5 million, the program fits most self-employed scenarios.

To be eligible for a P&L loan, the profit and loss statement can’t be self-prepared — it must come from a qualified third party: a Licensed CPA, a CTEC-registered tax preparer, or an IRS Enrolled Agent. The statement should cover the most recent one- or two-year period, itemize gross revenue, business expenses, and net income, and be presented on the preparer’s letterhead with signatures from both the preparer and the borrower. Advise your clients to engage the professional who already handles their business taxes, since familiarity with the company’s financials speeds up preparation and underwriting. A clean, professionally prepared P&L is the single most important document in the file and the fastest path to approval.

P&L loan interest rates are typically slightly higher than conventional mortgage rates, reflecting the reduced income documentation. The exact rate depends on the borrower’s FICO score, LTV/CLTV, loan amount, occupancy type, and the chosen term — we offer various fixed terms plus 5/6 and 7/6 ARMs, with temporary rate buydowns available to lower the payment in the early years. Interest-only options with a 120-month I/O period are also available for qualifying borrowers (min. FICO 680). For a live, scenario-specific quote, run the loan through our Quick Pricer or submit a scenario — our team responds within 30 minutes.

Both are Non-QM programs built for self-employed borrowers, but they verify income differently. A bank statement loan calculates income from 12 or 24 months of personal or business bank statement deposits, while a P&L loan qualifies the borrower from a one- or two-year profit and loss statement prepared by a CPA, CTEC-registered preparer, or Enrolled Agent — with no bank statements required up to 70% LTV.

A P&L loan is often the better fit when deposits are irregular, seasonal, or cash-heavy, or when the borrower wants a faster, lighter documentation process.

If your client’s deposits cleanly support their income, our 12/24 Month Bank Statement program (up to 90% CLTV) may be the stronger option.