Customer Concentration Risk Calculator

Under 25% per customer is the standard threshold most lenders use. 25-40% raises pricing or limits. Above 40% can affect approval. Above 60% is often a hard decline at bank tier — non-bank lenders may still fund but at meaningfully worse terms.

Diversify customer acquisition (broader marketing, more sales channels), shift to recurring/subscription revenue from a wider customer base, target an adjacent customer segment that doesn't overlap your existing top accounts. Reducing concentration takes 6-12+ months — start now if your top customer is over 25%.

Both, but the top few matter more. Lenders typically evaluate your top 3-5 customers cumulatively, not just #1 — a business with four customers each at 20% of revenue still has a narrowly concentrated base even though no single customer trips the 25% threshold. If your top 3-5 customers together account for the majority of revenue, expect the same underwriting scrutiny as a single large-customer file.

It softens the lender's view but doesn't eliminate the flag. A multi-year contract reduces the risk that the relationship ends abruptly, but the underlying structural dependency — most of your revenue tied to one counterparty's decisions and financial health — is still there. Expect better pricing than an at-will relationship at the same concentration %, not a waived flag.

It's evaluated against industry norms, but it still matters. A construction subcontractor with one anchor general contractor, or a franchise location with one parent operator, is compared to typical concentration levels in that industry rather than a generic SMB benchmark — but a file that's concentrated even by that industry's own standard still draws scrutiny. Being 'normal for the industry' narrows the pricing impact; it doesn't remove it.