If you’re a broker working in today’s mortgage market, chances are you’ve likely come across self-employed individuals looking to finance a property. In fact, as of 2024, over 9 million self-employed people are living in the United States. And as the gig economy continues to rise, that number is expected to increase.
The question is: do you have a loan program in place to accommodate these individuals’ mortgage needs?
Fortunately, when you choose LendSure as your partner, you have access to an innovative loan program that is specifically designed to meet these borrowers’ mortgage needs. Profit and Loss (P&L) loans allow borrowers to qualify for financing by using – you guessed it – their profit and loss statements.
Not only is it a simpler way for self-employed borrowers and business owners to secure mortgage financing, but this program also helps loan officers like you expand their mortgage business. Here are three main reasons to incorporate P&L loans into your loan offerings:
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No Tax Returns? No Problem!
Borrowers who can benefit from P&L loans are generally self-employed or business owners who often have trouble providing traditional income documentation. Since they may experience fluctuating cash flow or work in seasonal industries, it’s difficult to document total earnings through tax returns.
While tax returns may show one number, it does not reflect the true scope of the borrower’s revenue. Through P&L loans, a comprehensive examination is conducted that includes balance sheets, income statements, revenue trends, profit margins as well as overall financial performance. By analyzing their overall profitability, not just tax returns or bank statements, we make it easier to qualify for financing.
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Streamlined Process
Mortgage pros know the loan approval process can be lengthy – especially if you’re working with self-employed borrowers. Since P&L loans have alternative underwriting methods that require less paperwork, you can feel confident your client will secure fast funding. Traditional banks also require multiple years of tax returns, income verification forms, and extensive financial documentation that are not necessary with these loans. This allows them to move through the loan process faster and without any delays.
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Competitive Interest Rates
Your borrowers might think that it’s only possible to get low interest rates by working with a traditional lender like a bank. But that’s not the case. In fact, banks may only offer slightly higher rates due to the fact that your client is self-employed and cannot easily provide tax return documentation. On the other hand, alternative lenders like LendSure will offer borrowers competitive rates if they can demonstrate stable business profits as well as a strong financial history.
If you’re a broker looking to expand business and reach more types of borrowers, it’s crucial to incorporate P&L loans into your offerings. By offering this program, you’ll be perceived as a well-rounded pro who can work with all types of borrowers – even if they’re self-employed.
Closing with LendSure
At LendSure, we offer a flexible P&L loan solution that can help you and your clients. From higher LTVs to cash out options, there’s more room for flexibility when you partner with us.
Here’s a complete look at our guidelines:
- Loan amounts up to $1.5MM
- LTV up to 80% – depending on FICO score
- Cash-out up to $500K for LTV up to 65% and $350K for LTV up to 75%
- No self-employment questionnaire required
- Easy review with no bank statements required for loan amounts up to $1,000,000
- The P&L must cover the most recent 12 months (dated within 60 days of closing date)
- Borrower must provide two most recent months business bank statements
- Borrower must have been self-employed in the same business for 2 years, verified by one of the following: business license, letter from tax preparer, Secretary of State filing or equivalent
- Borrower must own a minimum of 50% of the business
- P&L must have been provided by a CPA, IRS Enrolled Agent, or California Tax Education Council
The LendSure Way
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently-owned property.
Are you ready to benefit from a common-sense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line. Did you like our guide to Profit & Loss loans? Check out another blog on the subject.
