---
title: "What Is a Business Loan Fund Rate? Benchmarks + How to Improve It | FunnelFi"
url: https://funnelfi.ai/guides/what-is-a-business-loan-fund-rate
description: "Fund rate defined, SMB and mortgage benchmarks, the exact formula, and the three levers that move it from single digits into double digits."
lang: en
---

Metrics

# What Is a Business Loan Fund Rate?

Fund rate is the fraction of leads that turn into funded loans. It is the single most honest metric in lending, and the one pre-qualification most directly moves.

Schedule Demo: https://funnelfi.ai/schedule-call

See pricing: https://funnelfi.ai/pricing

## The Formula

Fund rate = funded loans ÷ total leads

Measured over the same cohort window. If 100 leads enter the funnel this week and 5 eventually fund, your fund rate for that cohort is 5%.

The key discipline is **cohorting**. Deals fund with a lag, so a same-week numerator over a same-week denominator understates fund rate. Measure the cohort of leads that entered in a defined window, then wait long enough for the typical time-to-fund to elapse before locking the number.

## Benchmarks by Product

| Product | Low | Median | High |
| --- | --- | --- | --- |
| MCA / short-term | 3% | 5% | 8% |
| Equipment finance | 4% | 7% | 10% |
| Term loans | 3% | 6% | 9% |
| Lines of credit | 4% | 7% | 11% |
| SBA | 1% | 3% | 5% |

Pre-qualification on well-scoped criteria typically lifts each of these by 1.5–2.5×, because the funded numerator is roughly the same while the denominator shrinks.

## The Three Levers That Actually Move Fund Rate

- Source mix
  Kill sources whose fund rate can't clear cost.
- Pre-qualification
  Shrink the denominator by removing DNQ leads pre-human.
- Speed to first touch
  Every minute of delay past 5 min drops contact rate ~5%.

These stack. A book that fixes source mix, adds a pre-qual layer, and cuts time-to-first- touch to under 5 minutes routinely triples fund rate in a quarter without changing products, prices, or reps.

## Worked Example

A lender buys 1,000 leads at $35/lead. Current fund rate: 4%. Average commission per funded loan: $2,400. That's 40 funded loans, $96,000 gross commission, and $35,000 media cost, before rep salaries.

Add pre-qualification at $1.25 per screened lead. 400 leads DNQ and are removed. The 600 Qualified leads work at a 7% fund rate, 42 funded loans, $100,800 gross commission, $35,000 media cost + $1,250 pre-qual cost. Same funded volume, but reps worked 400 fewer files, freeing capacity to work another cohort.

Fund rate is now 7% on Qualified files, or 4.2% blended. The real story is what the reps did with the reclaimed hours.

## Frequently Asked Questions

- What is a good fund rate for SMB lending?
  For MCA and short-term business lending, healthy fund rates from raw leads run 3–8%. Post-pre-qual, well-run books push 8–15%. SBA is materially lower given the doc burden.
- Is fund rate the same as close rate?
  No. Close rate measures wins over qualified opportunities. Fund rate measures funded loans over total leads. Fund rate is a funnel-level metric; close rate is a sales-team metric.
- How does pre-qualification change fund rate?
  By removing the leads that would have failed underwriting anyway, before rep time is spent. The numerator (funded loans) is unchanged; the denominator (leads worked) shrinks.
- Should I measure fund rate by source?
  Yes. Source-level fund rate is where the real spend decisions live. A source with a 2% fund rate at $30/lead is losing money; a source with 12% at $30 is a growth channel.
- How often should I re-benchmark?
  Quarterly at minimum. Fund rate drifts as product mix, source mix, and credit conditions change.

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