A Profit & Loss (P&L) loan is a non‑QM mortgage that allows self‑employed borrowers to qualify using a CPA‑prepared or tax‑preparer‑prepared profit and loss statement, instead of tax returns, W‑2s, or bank statements.
California lenders describe these loans as ideal for business owners, entrepreneurs, and self‑employed professionals whose taxable income doesn’t accurately reflect their real business performance.
How It Works Instead of traditional income documentation, the lender uses:
• A 12‑ or 24‑month P&L statement prepared by a CPA or licensed tax preparer
• Sometimes a balance sheet (varies by lender)
• Business licensing or entity documentation
• A CA licensed tax preparer letter verification that the business is active over 2 years and stable