1099 loans and P&L loans for self-employed borrowers
A 1099 loan qualifies income from 1099s, often with an expense factor. A P&L loan uses a profit-and-loss statement, sometimes CPA-prepared. Both are Non-QM methods. There is no agency AUS for either.
How a 1099 loan turns gross receipts into qualifying income
A 1099 loan is for borrowers paid on 1099s: contractors, gig workers, some specialists. The lender takes 1099 gross, applies an expense factor or uses a P&L, and converts the result to monthly income.
One year of 1099s is a shorter history and often a tighter box. Two years is a smoother average. Gross vs net is whether expenses are a factor or documented. The factor, whether a CPA letter is required, and how much 1099 income must match deposits all vary by investor. Do not treat any specific factor as typical.
A profit-and-loss statement as the income story
A P&L loan uses a business profit-and-loss statement in place of, or on top of, tax returns. Many investors want a CPA-prepared P&L. Some accept a borrower-prepared P&L with extra conditions.
Who prepared it changes risk and often price. Seasoning is how current the P&L must be. Some boxes require the P&L to reconcile to bank activity. Some boxes only allow a P&L after another method fails.
Shared requirements
Both methods still run credit, LTV, reserves, and property rules. They are documentation paths, not a free pass.
Bank statement loan
Asset depletion loan
Non-QM income documentation
Non-QM loan hub
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