iwoca, one of Europe’s largest SME lenders, has secured a new funding line with initial commitments of £200 million from Barclays and Värde Partners. 

In January iwoca secured an increase and extension to its existing funding line, with long-standing partner Pollen Street Capital – from £125m to £170m – as demand for SME finance soared. With the new £200m funding line from Barclays and Värde, this now takes the total debt commitments to over £850m.

As high-street banks reduce access to capital for SMEs, this funding line equips iwoca to meet the growing SME demand for working capital. iwoca says its research indicates that high street banks are reducing their appetite for funding SMEs while demand grows.

This indicates that the funding gap for SMEs is set to widen without support from alternative lenders.

Across the UK and Germany, iwoca has lent over £2.5 billion since its launch in 2012 across more than 120,000 business loans. As of Q3 2023, the lender is on track to end the year having doubled the number of small business loans it has funded when compared to 2021.

iwoca’s top-funded sectors to date are as diverse as construction (15% of total funding); retail (11%); and manufacturing & food production (10%).

“We started iwoca after the financial crisis to offer SMEs the support that was so badly needed during uncertain times,” said Christoph Rieche, CEO and co-founder. 

“Now, over 10 years later, we are fully tested and have proven that we can be there for SMEs when they need us the most. With this new funding, we’re in an even better position to help smaller businesses in the UK and Germany at a time of economic uncertainty. 

“These SME businesses form the basis of a strong economy, and iwoca will lead from the front to help them thrive and achieve their goals.”

€5m seed round to boost customer onboarding checks

iwoca is reaching nearly three million businesses across the UK and Germany through its embedded lending technology, which allows businesses to access loans directly through a range of platforms such as accountancy software apps and digital neo-banks. 

In addition to its Flexi-Loan, the lender offers an omni-channel B2B payment solution – iwocaPay, and a Revenue-Based Loan, which it launched with eBay in 2022, where repayments are a percentage of a business’s monthly sales.

Aneek Mamik, global head of financial services & diversified private credit at Värde Partners, said “we are pleased to support the expansion of commercial financing opportunities in the UK through iwoca”.

He added: “iwoca’s differentiated sourcing and underwriting capabilities give us access to a high quality portfolio of commercial businesses. This builds on our leading position in providing commercial lending and leasing solutions to parts of the economy increasingly underserved as banks are less able to meet the full spectrum of the demand.”

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