P&L LOAN
Great for Fluctuating or Irregular Business Income
P&L non-QM loans make it easier for self-employed borrowers to qualify by using profit and loss statements instead of tax returns, giving a more accurate picture of their income. With flexible guidelines, higher loan amounts, and simpler documentation, they offer a faster path to homeownership than traditional mortgages.
Profit & Loss (P&L) Only Loans for Self-Employed Borrowers
Give your self-employed borrowers another path to home financing, with our P&L Only Loan Program. It provides an alternative documentation solution that allows eligible borrowers to qualify using a professionally prepared Profit & Loss statement instead of tax returns.
Whether your client is purchasing a home, refinancing an existing mortgage, or accessing equity through a cash-out refinance, our flexible underwriting helps you finance more self-employed borrowers with less documentation.
Ideal Borrowers for a P&L Loan
This program is an excellent solution for self-employed borrowers whose tax returns don't accurately reflect their true earning power.
Common borrower profiles include:
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Small business owners
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Sole proprietors
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Consultants
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Independent contractors
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Professional service providers
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Real estate professionals
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Construction company owners
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Medical and dental practice owners
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Restaurant owners
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Retail business owners
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Home service contractors
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Entrepreneurs across virtually every industry
If your borrower has strong business income but significant tax write-offs, a P&L loan may provide a much stronger qualifying income than conventional financing.
12-Month P&L Only Program Highlights
Our flexible guidelines make it easier to qualify self-employed borrowers.
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Qualify using a 12-month Profit & Loss statement
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No personal or business tax returns required
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No IRS tax transcripts required
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Purchase, rate-and-term refinance, and cash-out refinance available
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Simplified documentation compared to traditional mortgage programs
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Designed specifically for self-employed borrowers
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Additional documented income sources (such as W-2 wages, alimony, or child support) may be considered when documented separately
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Licensed, verifiable tax preparer certification required
How Income Is Qualified
Qualifying income is determined using the lower of:
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The income stated on the initial signed Uniform Residential Loan Application (1003), or
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The monthly income calculated from the certified 12-month Profit & Loss statement
This straightforward approach helps provide consistency while allowing your borrower to qualify without relying on tax returns.
Why Mortgage Brokers Use Our P&L Loan Program
A P&L loan can help you close transactions that may otherwise be difficult, or impossible to place with conventional financing.
Benefits include:
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Eliminate tax returns on eligible transactions.
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Help borrowers whose taxable income is reduced by legitimate business deductions.
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Offer a streamlined documentation process.
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Expand your non-QM financing solutions.
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Create more opportunities to qualify self-employed borrowers.
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Deliver solutions for borrowers who have been declined elsewhere.
When your borrower has a profitable business but complex tax returns, our P&L program may be the answer.
P&L vs. Bank Statement: Which One Is Right for Your Borrower?
Both programs are designed for self-employed borrowers, but the best option depends on how your borrower can best document their income.
A P&L Loan May Be the Better Choice When:
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A professionally prepared Profit & Loss statement accurately reflects business income.
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The borrower wants to avoid providing tax returns.
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A tax preparer can certify the P&L statement.
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The borrower's qualifying income is strongest using business profitability.
A Bank Statement Loan May Be the Better Choice When:
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Business or personal bank deposits better demonstrate income.
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Cash flow is more consistent than reported business profits.
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Deposits provide stronger qualifying income than a Profit & Loss statement.
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The borrower has substantial monthly deposits that support repayment ability.
Since 5th Street Capital offers both programs, our non-QM specialists will help determine which documentation method provides the strongest qualifying income for your borrower.
Why Partner with 5th Street Capital?
Every self-employed borrower has a unique financial story. That's why our experienced non-QM team works with mortgage brokers to identify the documentation option that gives each borrower the best opportunity for approval.
From initial scenario review through funding, you'll receive responsive communication, common-sense underwriting, and concierge-level service designed to help you close more loans.
Bring us your challenging self-employed scenarios. We're ready to help!
Have a borrower who owns a business? Contact your 5th Street Capital Account Executive today to determine whether our P&L Loan, Bank Statement Loan, or another non-QM solution is the best fit.