A Profit & Loss (P&L) Loan is a mortgage option designed for self-employed borrowers and business owners who may not qualify using traditional W-2 income or tax returns. Instead, qualifying income can be determined using a professionally prepared Profit & Loss statement that reflects the performance and cash flow of the borrower’s business.

P&L Loans can be especially helpful for borrowers whose tax returns show reduced taxable income because of legitimate business deductions. Depending on the loan program, the lender may review a 12- or 24-month Profit & Loss statement, along with additional business or financial documentation, to evaluate the borrower’s ability to repay the loan.

These loans may be available for primary residences, second homes, investment properties, purchases, and refinances. Qualification requirements can vary based on factors such as credit history, down payment, loan amount, reserves, property type, and the overall strength of the borrower’s financial profile.

Because P&L Loans are generally Non-QM mortgage products, interest rates, down payment requirements, and underwriting guidelines may differ from conventional financing. However, they can provide greater flexibility for self-employed borrowers who have strong business income but do not fit traditional mortgage documentation requirements.

Kal Duwage Mortgage Inc. can review your financial situation and help identify P&L Loan options that may fit your homeownership or investment goals.