Route 03
Profit and loss
A CPA-prepared profit-and-loss statement, sometimes with 1099s alongside it. The shortest route when your accountant already has the numbers.
Who this is
- You are a sole trader, a partner, or an S-corp owner
- You are paid on 1099s by a handful of clients
- Your accountant prepares interim statements you can produce quickly
What you hand over
- A profit-and-loss statement covering 12 or 24 months, prepared by a licensed CPA, EA or CTEC preparer
- 1099s for the period, where you are paid that way
- Two months of business statements to support the P&L
- Confirmation of your ownership share
How the figure is worked out
Net income from the statement is used directly, adjusted for the borrower’s ownership percentage. Because the preparer signs it, the statement carries more weight than deposits alone — and it usually prices better.
Do the arithmeticWhat trips this route up
- The preparer must be independent of you; a statement you prepared yourself will not be used.
- A P&L that disagrees with your bank statements will be questioned, and the lower figure tends to win.
- One quarter of unusual revenue does not make an annual income.
Where it leads
Programmes this route commonly unlocks
Demonstration form
Tell us about your p&l
Nothing on this form is sent anywhere. On a working site it would reach a loan officer with the route you arrived through already attached.
The other four
Most files use more than one
- Paystubs and W-2sThe straight strand. Salaried and hourly income, evidenced by paystubs, W-2s and a verbal verification of employment.
- Bank statementsTwelve or twenty-four months of deposits, with an expense factor applied. Built for owners whose tax return is written to minimise tax, not to qualify for a loan.
- AssetsNo income used at all. A verified pool of liquid assets is divided across the term to produce a qualifying figure. Common for retirees and for people between ventures.
- Rental incomeThe property qualifies, not you. Market rent is compared with the full housing payment to produce a debt-service coverage ratio.