Small business guide
A profit and loss statement, also called an income statement, shows what the business earned and spent over a period. Reading it top to bottom tells you where the money goes.
✓ Checking what you qualify for does not affect your credit score.
| Line | What it shows |
|---|---|
| Revenue | Sales for the period |
| Cost of goods sold | Direct costs of what you sold, such as materials or product |
| Gross profit | Revenue minus cost of goods sold |
| Operating expenses | Rent, payroll, insurance, marketing, utilities |
| Net income | Gross profit minus operating expenses |
| Line | Amount |
|---|---|
| Revenue | $100,000 |
| Cost of goods sold | $40,000 |
| Gross profit | $60,000 |
| Operating expenses | $45,000 |
| Net income | $15,000 |
Gross profit divided by revenue is the gross margin, here 0.60. Net income divided by revenue is the net margin, here 0.15.
To build one from scratch see how to create a profit and loss statement.
Profit is not cash. A profitable month can still end with less cash if clients pay late or you buy inventory. Pair it with a cash flow view. See cash flow statement.
Clean books make a funding review faster, because the numbers a funder reads in your bank statements match what you can explain. We fund from $25,000 to $5,000,000, decisions move fast, and funding can arrive in as little as 24 hours for qualified businesses. We read about three months of business bank statements, consider owners with a FICO score of 500 or above, and sole proprietors can apply.
See bookkeeping habits that make funding easier and the financial statements funders want, then start your application. It takes about five minutes and begins with a soft credit pull.
Gross profit is revenue minus direct costs. Net income is what remains after operating expenses as well.
Monthly, and compare with the same month last year for seasonal businesses.
No. Timing of payments, inventory and loan principal all affect cash separately.
Interest is an expense. The principal portion reduces what you owe and is not an expense.
They mostly read bank statements, but a profit and loss helps explain your numbers.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
