Profit & Loss Loan
Have Self-employed borrowers who don’t want to use tax returns or bank statements – no problem. Qualify your clients with a CPA or EA prepared P&L. Logan’s P&L Program gives your eligible Self-Employed Borrowers the flexibility to borrow up to $2.5 million using a P&L Statement in lieu of tax returns.
- Max Loan Amount $2.5 million
- Min 660 Credit Score
- Cash in hand Unlimited
- 12 or 24 Months Business, Personal or Both Ok
- Primary, 2nd Home & Investor Properties
- No LTV Restrictions for Condos
- Non Warrantable Condos OK
- Up to 80% LTV – Exceptions possible
- Gift of Equity Ok on Primary Homes
- Interest Only Options Available
- Max 6 loans or $5M – which ever comes first
Overview:
A profit and loss loan is for borrowers that are self-employed and may not be able to show stable income on bank statements or support their income over the last 2 to 3 months with bank statements therefore a 12 month P&L will give a look at income over the year versus month over month. No other income documentation aside from the Certified profit and loss is required to support income.
A 12 or 24 month profit and loss statement must be done by a third-party tax preparer. It can be a CPA, EA, or CTEC. The expenses are already included in the statement therefore no further deduction is applied when calculating income and the year end total is divided by 12 for a monthly income.
Tax Repair must write a letter to accompany the profit and loss statement that states the borrower has been self-employed for two years in the same line of work, that the tax preparer has done the taxes for the years they prepared the P & L for, and the percentage of ownership the borrower has in the business.
The business does not need to be a corporation or LLC. The borrower can be a sole proprietor without an established entity.
In a purchase transaction gift funds are allowed. There is no borrower minimum contribution. You can have 100% gift for down payment and closing costs. The reserve requirement does need to be satisfied with the borrowers own funds however since the borrower is self-employed business funds can be used to satisfy reserves. This would require an additional statement in the letter from the CPA that use of business funds will not negatively affect the business. In primary transactions, gift of equity is allowed.
You can finance single-family residences, one to four units, condominiums, non-warble condominiums and townhomes.