Loan Pipeline

A loan pipeline is every deal a lender is working on that has not closed yet, sorted by stage. It shows what is coming, where each deal sits and what is holding it up.

Common stages are:

1. Lead or inquiry. A borrower or broker reaches out.
2. Loan application. The borrower submits a request and documents.
3. Processing. Staff collect missing items and verify facts.
4. Underwriting. An analyst reviews the deal and writes a recommendation.
5. Approval. A loan officer or committee says yes, no or yes with changes.
6. Closing and funding. Documents are signed and money goes out.

Each lender names its stages its own way, but the idea is the same: one view of all open deals from first contact to funding.

Lenders track a few key measures:

• Volume by stage: number of deals and dollars at each step.
• Pull-through rate: the share of applications that end up funded.
• Time in stage: how many days a deal has sat at its current step.

Worked example. A lender has 40 applications in progress worth $8 million. Past data shows that 60% of applications fund. The expected closings are 24 loans, or about $4.8 million. That tells the lender how much capital it needs ready over the next few months.

Why it matters for lenders

The pipeline is the lender's best view of the near future. It shows whether loan goals will be met, whether there is enough money to fund approved deals and whether the team is overloaded. US bank examiners list pipeline reports among the management reports a lender typically keeps.

For a CDFI (community development financial institution), the pipeline also predicts whether enough new loans will reach its target market to meet certification tests. Approved but unfunded deals count toward capital already spoken for.

Stalled deals cost money. A borrower who waits too long for an answer often goes elsewhere.

How it works in practice

Each Monday, a small business lender's head of loan origination reviews the pipeline with her team. She sorts by time in stage. Five files have sat in processing for over two weeks, all waiting on tax returns. She assigns a processor to call those borrowers. Two approved deals still lack signed documents, so she flags them for closing.

In many shops, the pipeline report is a spreadsheet someone updates on Fridays. By Monday it is out of date, and deals that stalled midweek go unseen. When each deal's stage, documents and dates live in a CRM for lenders or loan system, the pipeline view updates itself as work moves forward.