A Game Changer for Self-Employed Borrowers in Sacramento

If you’re self-employed in Sacramento and struggling to get a mortgage, a P&L loan might be the perfect solution. Traditional lenders often require tax returns and W-2s, which don’t always reflect your true income as a business owner. Profit & Loss (P&L) loans offer a flexible alternative, allowing you to qualify for a mortgage based on your business’s P&L statements—not tax returns. This makes P&L Loans a popular solution for Self-employed home buyers and those looking to refinance.

With 1-Year and 2-Year P&L loan options, self-employed individuals can secure financing with higher flexibility and fewer income documentation requirements. Let’s explore how these loans work and why they’re an excellent choice for Sacramento entrepreneurs, freelancers, and independent contractors.

What Is a P&L Loan?

A Profit & Loss (P&L) loan is a Non-QM (Non-Qualified Mortgage) designed for self-employed borrowers who can’t qualify using traditional income verification methods. Instead of requiring W-2s, tax returns, or pay stubs, lenders assess your income using CPA-prepared P&L statements.

These loans come in two versions:

✅ 1-Year P&L Loan – Uses the most recent 12 months of P&L statements.
✅ 2-Year P&L Loan – Requires 24 months of P&L statements, offering a longer financial history.

This alternative financing option makes it easier for Sacramento business owners and entrepreneurs to secure a mortgage without jumping through hoops.

Who Can Benefit from a Sacramento P&L Loan?

P&L loans are ideal for:
✔ Self-employed business owners
✔ Freelancers & independent contractors
✔ Gig workers and entrepreneurs
✔ Real estate investors
✔ Small business owners with complex income streams

If you run a business and your taxable income doesn’t reflect your true earnings, a P&L loan can help you qualify for a home loan without bank statements or tax returns.

P&L Loan Requirements

To qualify for a 1-Year or 2-Year P&L loan, here’s what you need:

Credit & Loan Limits

• Minimum FICO Score: 660
• Maximum Loan Amount: $2.5 million
• Maximum CLTV: Up to 80%

Income Documentation

• No bank statements required up to 70% LTV
• Profit & Loss (P&L) statements reviewed by:
  • Licensed CPA
  • CTEC-registered tax preparer
  • IRS Enrolled Agent

Debt-to-Income (DTI) Ratio

• DTI up to 55% is allowed
• Income support tolerance: 25%

💡 What does this mean? You can qualify with a higher debt load compared to traditional loans, offering more flexibility.

How Much Can You Cash Out?

Want to tap into your home equity? P&L loans allow for generous cash-out refinancing options!

💰 Max Cash-in-Hand:

• $500,000 if CLTV is above 65%
• $1,000,000 if CLTV is between 55% – 65%
• Unlimited cash-out if CLTV is below 55%

If you need a large sum of cash for business investments, home renovations, or personal expenses, this is one of the most flexible loan programs available.

Get Prequalified for a Sacramento P&L Loan Today!

At New Way Mortgage, we specialize in P&L Loans to help self-employed homebuyers and investors secure financing without tax returns.

📞 Call or text us at 916-465-6639
📧 Email us at hello@newwaymortgage.com
📅 Schedule an appointment HERE

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FAQs About P&L Loans

❓ What is a P&L loan?

A P&L loan is a Non-QM mortgage that allows self-employed borrowers to qualify using Profit & Loss statements instead of tax returns.

❓ Can I qualify with only one year of business history?

Yes! Businesses that have existed for at least 12 months can qualify under certain conditions.

❓ Do I need bank statements to qualify?

No! Bank statements are not required for LTV up to 70%.

❓ What is the maximum loan amount for a P&L loan?

You can borrow up to $2.5 million depending on your qualifications.

❓ How do I apply for a P&L loan?

Simply apply here or contact us at 916-465-6639 to start your preapproval process.

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