Matt is wrong. A masters degree is NOT a failed Phd - it is a seperate degree taken at a different time in a career.
Original question - I got a distinction on my Masters (in research). Out of 8 modules 4 + dissertation needed to be 70% or above.I got over 70% in 7/8 modules.
But - funding is more to do with, do-ability of your proposal, your ability to do it (e.g. appropriate training), suitability of your supervisor and a good research proposal.
That's what counts - not if you have a distinction or not.
Good luck