Iwoca secures new £200m funding line
Small business lender Iwoca has announced a new funding line with initial commitments of £200m from Barclays and Värde Partners.
The substantial additional funding line raises the lender’s total debt commitments to more than £850m.
In January, Iwoca secured an extension to its existing funding line with longstanding partner Pollen Street Capital from £125m to £170m.
As high-street banks reduce access to capital for small businesses, the funding will help Iwoca meet the growing demand for working capital among small and medium-sized enterprises (SMEs).
Read more: Iwoca: Almost half of SMEs fail to meet start-up objectives on time
According to the lender’s second quarter SME Expert Index, more than four in five brokers (84 per cent) reported that high street banks were reducing their appetite for funding SMEs. This was an increase of 7 percentage points on the first quarter of 2023.
A similar proportion of SME finance experts (81 per cent) predicted demand for finance among SMEs would increase by the end of the year.
Iwoca has lent more than £2.5bn across the UK and Germany since its launch in 2012, via more than 120,000 business loans.
As of the third quarter of 2023, the lender says it 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 construction (15 per cent of total funding); retail (11 per cent); and manufacturing and food production (10 per cent).
Read more: Iwoca: SMEs deprioritising going green due to high costs
“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,” Iwoca chief executive and co-founder Christoph Rieche (pictured) said.
“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.”
Värde Partners global head of financial services and diversified private credit Aneek Mamik added: “We are pleased to support the expansion of commercial financing opportunities in the UK through Iwoca.”
“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.”
Read more: Country focus: Germany’s flourishing P2P lending sector