P&L Only Refinance in Arizona 2026: Qualify With a CPA Prepared Profit and Loss

Here is the situation we see constantly in Scottsdale and Phoenix. Someone runs a profitable business, takes every legitimate deduction their accountant can find, and ends up with a tax return that shows almost nothing. Then they try to refinance and a retail lender tells them they do not make enough money. The business is fine. The documentation method is the problem.

What a P&L only refinance actually is

It is a Non-QM refinance that uses a business profit and loss statement as the primary income document. Revenue minus expenses over a 12 or 24 month period produces a net profit, your ownership percentage is applied to it, and that becomes the qualifying income.

The word that matters is only. On a true P&L only program, bank statements are not required to support the numbers on the statement. That is the difference between this and a bank statement loan, where deposits are what get counted and the P&L is supporting documentation at best.

Why it exists: your tax return is a document built to legally minimize what you owe. IRS Schedule C lets you write off depreciation, a home office, vehicle mileage, equipment under Section 179, and a long list of other legitimate expenses. Every one of those reduces taxable income, and a conventional underwriter reads that reduced number as your actual earning power. A P&L looks at business performance instead.

These sit outside the Qualified Mortgage box, and lenders still have to satisfy the ability to repay requirements in Regulation Z, 12 CFR 1026.43. Non-QM does not mean no underwriting. It means a different way of proving the same thing.

Who is allowed to prepare the statement

Not you. The P&L has to come from a licensed third party tax professional, and lenders are specific about who counts.

• A CPA. The cleanest option and the one underwriters question least.
• An Enrolled Agent. Federally licensed to represent taxpayers before the IRS, and accepted on essentially every program we see.
• A PTIN holder. Any paid preparer registered with the IRS. The IRS PTIN requirements page is where underwriting verifies the number is active.
• A CTEC registered preparer in states that run their own registry.

A bookkeeper who is not credentialed will not clear underwriting on most programs, and a QuickBooks export you ran yourself definitely will not. The preparer also has to sign it, date it, and usually provide a letter stating how long they have prepared for the business.

Practical note: call your accountant before you call a lender. September through October is a reasonable ask. Try getting a signed P&L out of a CPA during the first two weeks of April and you will lose your rate lock waiting.

What underwriting still checks

The P&L replaces the income documentation. It does not replace everything else.

Two years of business existence. Verified independently through a business license, an Arizona Corporation Commission filing, an active transaction privilege tax license through the Arizona Department of Revenue, or a CPA letter. Some lenders will look at a shorter history with compensating factors, but two years is the standard.

Ownership percentage. Typically 20% at minimum, and often 25% or more. Your share of net profit is what counts, so a 30% partner in a business netting $400,000 qualifies on roughly $120,000, not $400,000.

Credit. Programs start around 620 to 660. Pricing improves meaningfully above 700, and above 740 the gap against a conventional rate narrows a lot.

Equity. This is where P&L only costs you. Loan to value limits run tighter than conventional, and tighter still on a cash out. Plan on leaving real equity in the property rather than pulling to the maximum.

Reserves. Several months of payments in liquid assets after closing, and the requirement goes up as loan to value goes up.

P&L only against the other self employed options

The honest comparison most people need: if your deposits are clean and consistent, a bank statement refinance usually prices better than P&L only. If you are paid on 1099s, the 1099 income refinance is simpler. If your balance sheet is stronger than your income statement, look at asset depletion instead. P&L only earns its place when deposits are messy, income runs through multiple accounts or entities, or the business is profitable in a way that no single account shows.

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Where these files fall apart

Four things kill P&L only refinances, and all four are preventable if you know about them in week one.

The P&L contradicts a return the lender already has. If you submitted a tax return anywhere in the file, for any reason, and the P&L shows income wildly out of line with it, underwriting will ask. There is usually a legitimate explanation, growth, a one time expense, a change in entity structure, but it needs to be in writing from the preparer up front instead of scrambled together on day twenty.

Personal expenses buried in the business. The P&L has to reflect the business. Running a car payment, a family phone plan, and a vacation through the company is common and it is also why some P&Ls get challenged. Underwriters read these for a living.

The preparer has no relationship with the business. A CPA who prepared the statement last Tuesday having never worked with the company is a red flag. Most programs want the preparer to confirm an ongoing relationship.

Ownership documentation does not match. An operating agreement showing 50% while the borrower claims 100% stops the file cold. Get the entity paperwork current before you apply.

If you want the wider view of what is available outside conventional guidelines, our Non-QM refinance guide for Arizona covers the full set, and our bank statement loan page lays out the alternative most people compare this to. You can see everything we price on the loan programs page, or reach our team at Pillar Mortgage Group directly. If you are refinancing with a move in mind, browse available homes in the Phoenix and Scottsdale area at Arizona Luxury Property Search.

Honest caveat: a P&L only refinance costs more. The rate runs above conventional, the loan to value limits are tighter, and you will pay your accountant for the statement. If your tax returns actually support the loan, use them and take the better rate. This program is for people whose returns genuinely do not reflect what the business earns, not for people who would simply prefer less paperwork. We would rather run both sets of numbers and tell you conventional wins than put you in a more expensive loan you did not need.

Frequently asked questions

Can I refinance in Arizona without tax returns?

Yes. A P&L only refinance qualifies you on a profit and loss statement prepared by a licensed tax professional, with no tax returns required. Bank statement, 1099 only, and asset depletion programs are the other routes that skip returns.

Who has to prepare the P&L for the loan?

A licensed third party: a CPA, an Enrolled Agent, an IRS PTIN holder, or a CTEC registered preparer. A statement you produced yourself from accounting software will not clear underwriting, and most programs also want a letter confirming the preparer has an ongoing relationship with the business.

How long do I need to be self employed for a P&L only refinance?

Two years is the standard, verified through a business license, a Secretary of State or Corporation Commission filing, an active Arizona transaction privilege tax license, or a CPA letter. Some lenders will consider a shorter history with strong compensating factors.

What credit score do I need for a P&L only refinance in Arizona?

Programs generally start in the 620 to 660 range. Pricing improves meaningfully above 700, and above 740 the gap between a P&L only rate and a conventional rate narrows considerably.

Is a P&L only refinance better than a bank statement loan?

Not usually. If your business deposits are consistent and run through one account, a bank statement refinance typically prices better. P&L only earns its place when deposits are irregular, income flows through multiple accounts or entities, or no single account reflects how the business actually performs.

Can I take cash out on a P&L only refinance?

Yes, but the loan to value limits are tighter than on a rate and term refinance, and tighter than conventional cash out. Plan on leaving more equity in the property than you would with a full documentation loan.