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title: "Year-to-date P&L for a loan: what lenders want | Ledgerbrook"
source: https://ledgerbrook.com/blog/year-to-date-profit-and-loss/
description: "A year-to-date profit and loss statement for a loan: a sample, what underwriters test it against, and what to do if behind."
---

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# Year-to-date P&L for a loan: what lenders want

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[Omkar Moraye](/about/) · October 22, 2026

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## What is a year-to-date profit and loss statement for a loan?

A year-to-date profit and loss for a loan shows income and expenses from January 1, or the fiscal year's first day, to the latest month end, with a balance sheet on the same date. It must tie to the bank statements and tax returns the lender collects. If the books are behind, catch up and reconcile every month first.

A year-to-date profit and loss statement is one of the first documents a lender asks for after the application itself, and one that owners with books behind cannot produce on the day. The request reads simply: a P&L and balance sheet as of the most recent month end. The trouble starts when the books stopped being reconciled in spring, the owner’s draws were coded as wages, and the loan payments went to an expense account. The report still runs. It just shows a business that does not match its bank statements, and the underwriter has those too.

This post shows what a lender means by the request, a sample YTD P&L and balance sheet that would hold up, what the underwriter checks them against, and what to do when the books are months behind. The SBA rules are quoted from the SBA’s own operating procedure, not from lender summaries.

## What a lender means by a year-to-date P&L

A year-to-date (YTD) profit and loss covers the current fiscal year from its first day to the last closed month end. For a calendar-year business applying in October, that is January 1 to September 30. It is not a trailing twelve months, and it is not “through today”: a P&L that stops mid-month leaves out bills not yet entered and deposits not yet categorized, so lenders usually want it through the last full month.

The P&L almost never travels alone. The lender wants a balance sheet dated the same day, because the two prove each other: the year’s profit, less what the owner took out, has to show up in equity on the balance sheet. A P&L with no balance sheet can be made to say anything. A matched pair cannot.

What comes with them depends on the loan, but a business loan package usually includes:

- **Year-end financial statements or business tax returns** for the past two or three years, so the year-to-date figures can be compared with full years.
- **Business bank statements** for recent months, which the underwriter matches to deposits on the P&L.
- **A debt schedule** listing every loan, line of credit and card balance, with payments and rates.
- **A personal financial statement** from each owner who will guarantee the loan.

## A sample year-to-date profit and loss statement

The company below is invented for this post: Northgate Plumbing LLC, a single-member LLC that reports on Schedule C, applying for an equipment loan in October 2026. The numbers are consistent with each other, which is the point of the example.

**Northgate Plumbing LLC, Profit and Loss, January 1 to September 30, 2026 (accrual basis, example only)**

| Account | Amount |
| --- | ---: |
| Service income | $548,300 |
| Parts and materials billed | $96,500 |
| **Total income** | **$644,800** |
| Materials and parts | $118,600 |
| Subcontractors | $41,200 |
| Field wages | $156,900 |
| **Total cost of goods sold** | **$316,700** |
| **Gross profit** | **$328,100** |
| Office wages | $48,600 |
| Payroll taxes | $17,300 |
| Vehicle fuel and repairs | $22,400 |
| Insurance | $19,800 |
| Rent | $27,000 |
| Software and phones | $6,900 |
| Advertising | $11,200 |
| Professional fees | $4,500 |
| Depreciation | $15,750 |
| Bank and card fees | $7,350 |
| **Total operating expenses** | **$180,800** |
| **Operating income** | **$147,300** |
| Interest expense | $4,350 |
| **Net income** | **$142,950** |

Three things an underwriter looks for are visible here. There is no `Owner Draws` line among the expenses, because draws are equity. There is no `Loan Payments` line, because only the interest part of a loan payment is an expense. And depreciation is on the P&L, which tells the lender the fixed assets are on the balance sheet and being written down.

## The balance sheet on the same date

**Northgate Plumbing LLC, Balance Sheet, as of September 30, 2026 (example only)**

| Account | Amount |
| --- | ---: |
| Business checking | $84,250 |
| Accounts receivable | $63,900 |
| **Total current assets** | **$148,150** |
| Vehicles and equipment | $126,000 |
| Accumulated depreciation | ($47,250) |
| **Total fixed assets** | **$78,750** |
| **Total assets** | **$226,900** |
| Accounts payable | $21,600 |
| Business credit card | $8,940 |
| Payroll liabilities | $6,180 |
| Equipment loan | $52,400 |
| **Total liabilities** | **$89,120** |
| Owner’s capital (January 1) | $84,830 |
| Owner draws | ($90,000) |
| Net income | $142,950 |
| **Total equity** | **$137,780** |
| **Total liabilities and equity** | **$226,900** |

Read the two together and they agree:

- **Equity rolls forward.** $84,830 at January 1, less $90,000 of draws, plus the $142,950 of profit on the P&L, is $137,780.
- **The loan balance moves by principal only.** Nine payments of $1,900 total $17,100. Of that, $4,350 is the interest on the P&L and $12,750 is principal, which took the equipment loan from $65,150 on January 1 to $52,400.
- **Depreciation agrees.** $15,750 on the P&L is nine months of $21,000 a year, and accumulated depreciation has grown by the same amount.
- **Cash ties to the bank.** The September statement ends at $91,430. Less $7,180 of checks written but not yet cleared, that is the $84,250 on the balance sheet, and the September bank reconciliation shows the same two numbers.

If an owner cannot make those four statements about their own file, the underwriter will find the gap first.

## What underwriters check a P&L against

An underwriter treats a management-prepared P&L as a claim to be tested, not as evidence. These are the tests, and the most common way each one fails.

| Check | What they compare | How it usually fails |
| --- | --- | --- |
| Bank deposits | Income on the P&L against deposits on the bank statements | Transfers between accounts or owner contributions counted as income; the same sale recorded twice, once on a sales receipt and again from the bank feed |
| Tax returns | Last year’s P&L against the filed Schedule C or business return | The CPA’s adjusting entries were never posted to the books, so last year’s profit in QuickBooks differs from the return |
| Owner pay | Draws, distributions and owner wages | Draws booked to `Wages` or `Contract labor`, which understates profit by the full amount |
| Loan payments | Interest on the P&L, principal on the balance sheet | The whole payment expensed, which understates profit and leaves a loan balance that never falls |
| Debt schedule | Every balance-sheet loan against the debt schedule and credit report | A loan or card that appears in one and not the other |
| Placeholder accounts | Negative cash, `Uncategorized Asset` or `Opening Balance Equity` on the balance sheet; `Uncategorized Expense` or `Ask My Accountant` on the P&L | Balances that tell the underwriter nobody has finished the file |

The owner pay and loan payment rows matter more than they look. Lenders size a loan on cash flow, so they rebuild profit from the P&L before applying their ratios. At Northgate, coding the $90,000 of draws as wages would have shown $52,950 of profit instead of $142,950, and expensing the full loan payments would have taken off another $12,750. The P&L would show $40,200 of profit, less than a third of the real figure.

## What the SBA requires

For SBA-guaranteed loans, the rules are in the SBA’s standard operating procedure for lenders, [SOP 50 10 8.1](https://legacy.sba.gov/document/sop-50-10-lender-development-company-loan-programs), in effect from October 1, 2026. What it says about financial statements, by program (SBA Express loans follow the lender’s own credit procedures for similarly sized loans, so they are left out):

| Program | Financial statements the lender must analyze | Dating rule |
| --- | --- | --- |
| Standard 7(a), loans over $350,000 | Year-end balance sheets, with a detailed debt schedule, and P&L statements for the last 3 years, or tax returns, plus an interim balance sheet with debt schedule and an interim P&L | Business financial statements dated within 120 days of submission to SBA, the general rule for all 7(a) applications in Appendix 20 |
| 7(a) Small, loans of $350,000 or less | For the repayment test, the last year-end statement alone, the last year-end plus an interim statement, or 12-month projections | Year-end statement dated and received within 120 days of year end; interim statements dated within 120 days of submission to SBA |
| 504 | A balance sheet and income statement, plus an aging of accounts receivable and payable | Dated within 120 days before submission to SBA |

Several other rules in the SOP bear directly on the YTD P&L:

- **Repayment is measured on cash flow.** Debt service coverage is operating cash flow, defined as earnings before interest, taxes, depreciation and amortization, divided by all required principal and interest payments including the new loan. Standard 7(a) loans need at least 1.15 on a historical or projected basis; 7(a) Small loans need 1.10. Owner’s draw is one of the adjustments the lender has to justify when it calculates cash flow, which is why it has to be visible rather than buried in an expense line.
- **The financial statements must agree with the tax returns.** The SBA’s tax verification has two purposes: to confirm the business filed its returns, and to confirm “the Applicant’s financial statements provided as part of the application agree with the business tax returns submitted to the IRS.” Except for SBA Express and Export Express, lenders pull IRS transcripts through the IRS’s IVES program (Form 4506-C) or Form 8821, and must resolve significant differences. A business that has not filed required federal returns is not eligible.
- **Bank statements are reviewed.** For 7(a) Small loans the lender reviews the two most recent months of activity on the primary operating account to confirm every debt is in the cash flow calculation.
- **A current debt schedule is expected,** including any shareholder debt, for standard 7(a) loans.
- **Owners of 20% or more guarantee the loan.** Anyone with 20% or more ownership must give an unlimited guaranty, and each owner of 20% or more and each guarantor, other than supplemental guarantors, gives a personal financial statement dated within 90 days, on SBA Form 413 or the lender’s equivalent.

Individual lenders add their own requirements on top, and many ask for more than the SOP minimum. The lender’s checklist governs; the SOP is the floor.

## How do I get a year-to-date profit and loss statement?

If the books are current, it takes a few minutes. In QuickBooks Online, go to **Reports**, then **Standard reports**, and open **Profit and Loss Comparison**. By default it shows the current year to date next to the same period last year ([Intuit](https://quickbooks.intuit.com/learn-support/en-us/help-article/report-management/run-profit-loss-comparison-report/L6GthoBhe_US_en_US)), which is the comparison underwriters make anyway. Set the **Report period** to end on the last closed month end, then run the **Balance Sheet** for that same date.

Two settings matter before exporting:

- **Accounting method.** Choose the method the tax return uses, cash or accrual, so last year’s column matches the return the lender is checking it against.
- **The end date.** Use the last month whose bank and card accounts are reconciled. A P&L run to a date nobody has reconciled is the version most likely to change after the lender has it.

Export both to PDF with the company name, report title and dates in the header, and keep the files; a lender will often ask for the same reports again, updated, before closing.

## Management-prepared, compiled or reviewed

A P&L exported from the company’s own books is **management-prepared**, also called internally prepared or borrower-prepared. No accountant has reported on it, and the lender knows that. Many lenders accept it for a small business loan: the SBA SOP lists “internal statement” as an acceptable year-end statement for 7(a) Small loans, and Fannie Mae’s guide for mortgages lets a lender use a P&L that is “audited or unaudited” ([Fannie Mae Selling Guide B3-3.7-04](https://selling-guide.fanniemae.com/sel/b3-3.7-04/analyzing-profit-and-loss-statements)).

Larger loans and lines of credit can require a CPA’s involvement. The SOP’s Working Capital CAPLine rules, for example, accept borrower-prepared statements for lines of $1,000,000 or less and require compiled, reviewed or audited statements above that. In rising order of assurance:

| Level | Who prepares it | What the CPA says about it |
| --- | --- | --- |
| Management-prepared | The business or its bookkeeper | Nothing; no CPA report |
| Compiled | A CPA, from the company’s records | No assurance; the CPA presents the information without verifying it |
| Reviewed | A CPA, after analytical procedures and inquiries | Limited assurance that no material changes are needed |
| Audited | A CPA, after testing the records | Reasonable assurance that the statements are fairly presented |

A compilation, review or audit starts from the same books. If those are behind or unreconciled, the catch-up comes first anyway.

## If the books are behind when the lender asks

The lender’s request has a date on it, and for SBA loans the 120-day windows above mean a stale P&L will not do. The path from behind to a P&L that holds up has four steps, in this order:

1. **Collect every statement.** Bank, card and loan statements for every month since the books were last reconciled, plus payroll reports. This is usually the slow step, and it is the one only the owner can do.
2. **Catch up the books.** Every transaction entered and categorized, owner draws separated, loan payments split between interest and principal, and every account reconciled month by month to the statements. At Ledgerbrook a typical small-business year takes 5 business days, counted from the day every statement is in hand; [how long catch-up bookkeeping takes](/blog/how-long-does-catch-up-bookkeeping-take/) explains where the days go.
3. **Close the last month properly.** Accruals, depreciation and payroll liabilities posted, and the balance sheet read line by line, as in the [month-end close checklist](/blog/month-end-close-checklist/).
4. **Run the reports and check them yourself first.** Do the four tie-outs in the sample above before the lender does.

Do not send a P&L from books you know are wrong with a promise to fix it later. A second version with different numbers is harder to explain than a week’s delay, and the lender already has the first one.

## Common questions about YTD P&L statements for loans

### Can I make my own profit and loss statement?

Yes. Many lenders accept a management-prepared P&L for a small business loan, and the SBA and Fannie Mae rules above allow it. What the lender is really asking is whether it agrees with the bank statements and tax returns. A P&L typed into a spreadsheet template, with no books behind it, usually fails that test, because there is no reconciled ledger to show when the underwriter asks where a number came from.

### Can a lender verify a P&L?

Yes, in several ways. They compare deposits to income on bank statements, compare the prior year to the tax return, and for most SBA loans pull IRS tax transcripts through Form 4506-C or Form 8821 to confirm the return they were given is the one filed. The year-to-date figures cannot be checked against a return yet, which is why lenders lean on the bank statements for the current year.

### Do underwriters look at gross or net income?

Both, but repayment is judged on profit, adjusted. For SBA loans the starting point is earnings before interest, taxes, depreciation and amortization, then the lender adds back or subtracts items like owner’s draw and non-recurring income. Revenue shows the size of the business; adjusted profit shows whether it can carry the payment.

### What is the 20% rule for an SBA loan?

Anyone who owns 20% or more of the business must personally guarantee an SBA loan in full and give a personal financial statement. A spouse who owns less than 20% must also guarantee it when the spouses’ and minor children’s combined ownership is 20% or more (SOP 50 10 8.1, guaranty requirements).

### How much does it cost to get a profit and loss statement?

From current books, nothing: the report runs in seconds. The cost is in getting the books current. Catch-up bookkeeping at Ledgerbrook is $99 per month of backlog, so a file nine months behind, January through September, is $713 with the 20% discount for six months or more. [Catch-up bookkeeping cost](/blog/catch-up-bookkeeping-cost/) compares what other firms charge.

### What if the loan is a mortgage, not a business loan?

Self-employed mortgage borrowers meet a different rule. Fannie Mae’s guide says a year-to-date P&L “is not required for most businesses,” but the lender may require one if the application is dated more than 120 days after the end of the business’s tax year. The same tie-outs apply when they do.

## Getting the numbers ready before the lender asks

A loan application is the moment the books stop being a tax-season chore and start being evidence. Ledgerbrook catches up the missing months in your own QuickBooks Online file, reconciles every account to the statements, separates owner pay and loan principal, and closes the last month so the YTD P&L and balance sheet agree with each other and with the bank. Catch-up is a fixed price per month of backlog, agreed before work starts; details are on [QuickBooks catch-up bookkeeping](/quickbooks-catch-up-bookkeeping/).

$99per month of backlog20% off 6+ months

> **When to hand this off:** if the last reconciled month is more than 120 days back, or last year’s books do not match the filed return, the lender’s request is a catch-up job, not a report. A [free file review](/contact/?from=blog%2Fyear-to-date-profit-and-loss) gives you the month count and the fixed price within 48 hours.

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