Commercial Loan Origination Cycle Time

Commercial Loan Origination Cycle Time

KPI Details

Commercial Loan Origination Cycle Time measures the number of calendar days required to close and fund commercial loans, from the time that the commercial loan application is received from potential borrower to when the commercial loan is closed and funded. This metric is crucial in comparing the end-to-end new commercial loan origination process and performance against customer expectations. Extended cycle times can occur due to complex application and underwriting processes, unclear application requirements for borrowers, multiple follow-ups for additional information, increased error rates due to multiple touch points per application, and inconsistent use of training materials during commercial loan processing.

KPI Definition

The number of calendar days required to close and fund commercial loans, measured from the time that the commercial loan application is received from the potential borrower, until when the loan has been closed and funded.

KPI Calculation Instructions Commercial Loan Origination Cycle Time?

Two numbers are used to calculate this KPI: (1) the number of calendar days required to close and fund commercial loans (measured from the time that the commercial loan application is received from the potential borrower, until when the loan has been closed and funded), and (2) the total number of commercial loans received. Include business days as well as weekends in the numerator. The date at which the application is received is the date from which the customer submits the application to the financial institution, regardless of area. Since the closing and funding dates may not be the same, use whichever date is later for this calculation.

KPI Formula :

(Sum of Calendar Days Required to Close and Fund Commercial Loans) / Total Number of Commercial Loans Received