Each lender vhas their own requirements and criteria when it comes to “cpa letters”, here is one of our lenders as an example.
The example form could be completed by a qualified professional who holds at least one of the following credentials:
Certified Public Accountant (CPA)
Enrolled Agent (EA)
California Tax Education Council registrant (CTEC)
The following portions of the form must be completed in full:
Preparer Information
Business Information
The signature section must include either a valid electronic signature with appropriate e-certification or an original handwritten signature.
The preparer must also provide the following:
Professional license or credential number
Date signed
Printed name
Telephone number
Firm or company name
Physical business address
The preparer’s license or credential must be verifiable through a publicly available database. When public verification is unavailable, a copy of the current license or credential must be included.
Complete the following sections only when specifically required:
Use of Business Funds
Profit and Loss Statement
Important: Credential requirements may vary by loan program and income-documentation type. Review the applicable program matrix before submitting the form to confirm that it has been prepared by an eligible professional. Individuals who hold only a PTIN are not considered qualified preparers.
Consolidated Profit and Loss Expense Definitions
Cost of Sales / Direct Costs
Expenses directly related to producing goods, completing customer orders, or providing services, including raw materials, inventory, and necessary supplies.
Payroll and Labor
Compensation paid to W-2 employees, excluding the business owner, and 1099 independent contractors. This category also includes applicable payroll taxes and employee benefits.
Occupancy and Utilities
Business-related rent or lease payments, utilities, internet service, telephone service, and other essential connectivity expenses.
Advertising and Business Promotion
Costs associated with marketing, advertising, social media, digital directories, promotional campaigns, and brand development.
Equipment and Maintenance
Expenses for purchasing or leasing business equipment, machinery, computers, and technology, as well as repair parts, servicing, and maintenance labor.
Insurance and Professional Services
Business insurance and bonding premiums, together with legal, accounting, bookkeeping, tax preparation, and regulatory-compliance fees.
Transportation, Logistics, and Travel
Business expenses for vehicles, fuel, vehicle or fleet maintenance, shipping, airfare, lodging, and other travel required for business operations.
Taxes, Licenses, and Government Fees
Non-payroll tax obligations, including business property taxes, licenses, permits, registrations, and other governmental charges.
Interest Expense
The interest portion of payments made on business loans, mortgages, lines of credit, or other financing
obligations. This amount may be used when evaluating business debt coverage.
General, Administrative, and Other Expenses
All remaining operating and overhead expenses not included in the categories above, such as office supplies, administrative costs, subscriptions, and miscellaneous business expenses.