P & L STATEMENT
Loan Guidelines

P&L Statement (Profit and Loss Statement) loans are a type of mortgage loan that considers the borrower’s profit and loss statement from a business or investment property as a primary factor in determining loan approval and loan amount. Here are some common guidelines for P&L Statement loans:

Minimum Credit Score
P&L Statement loan lenders typically require a minimum credit score of 680 to 700, although some may accept scores as low as 660 or as high as 740 or 750.

Debt-to-Income Ratio
P&L Statement loan lenders may have more lenient debt-to-income (DTI) ratio requirements compared to conventional mortgages. DTI ratios can range from 43% to 50%, or even higher, depending on the lender and the borrower’s overall financial situation.

Profit and Loss Statement
The P&L statement is a critical factor in determining loan approval and loan amount. Lenders will evaluate the borrower’s P&L statement to assess their ability to generate consistent profits from their business or investment property.

Loan-to-Value (LTV) Ratio
P&L Statement loan lenders may have more lenient loan-to-value (LTV) ratio requirements compared to conventional mortgages. LTV ratios can range from 75% to 90%, or even higher, depending on the lender and the borrower’s overall financial situation.

Cash Flow
P&L Statement loan lenders will evaluate the borrower’s cash flow from their business or investment property to ensure that they have a consistent income to support the mortgage payments.

Experience
P&L Statement loan lenders often require borrowers to have significant experience in their industry or business, demonstrating their ability to manage a successful enterprise.

Assets
P&L Statement loan borrowers may need to show additional assets, such as savings accounts, investments, or other liquid assets, to prove their financial stability and ability to repay the loan.

Loan Purpose
P&L Statement loans are often used for investment properties, rental properties, or commercial properties. Borrowers should ensure that their loan purpose aligns with the lender’s guidelines for P&L Statement loans.

Collateral
P&L Statement loan lenders may require collateral, such as the property being purchased or other assets, to secure the loan.

Loan Terms
P&L Statement loan terms may vary depending on the lender and the borrower’s financial situation. Loan terms can include fixed-rate or adjustable-rate mortgages, interest-only payments, or balloon payments.

It’s essential for borrowers to carefully review their credit and financial situation before applying for a P&L Statement loan. They should also work with a qualified mortgage professional to help navigate the more complex lending requirements for these types of loans.