Digital lender iwoca is expanding its funding base for the German market by adding a new credit line of €185m (£156m).

Dutch bank ABN Amro is acting as the senior lender, with investment manager Neuberger providing the mezzanine tranche to increase the overall capacity of the facility.

The new refinancing enables iwoca to meet the rising demand for small and medium-sized enterprise (SME) loans, expanding its commitment in Germany to over €560m in total.

Read more: Challenger and specialist lenders overtake banks for SME finance

“Iwoca has established a compelling business model that serves an important gap in the German SME financing market,” said Sachin Patel, managing director at Neuberger Berman.

Fabian Platzen, general manager of iwoca Germany, said the firm more than doubled its loan book in Germany over the last 12 months. “Demand comes directly from our customers’ daily operations: they purchase goods, invest in their growth, and bridge liquidity spikes,” he added.

In Germany, iwoca nears 13,000 active loan customers and, by 2028, it plans to increase its German loan book to €1bn and serve between 30,000 and 35,000 active SME customers.

Adriaan Wessels, executive director of structured finance at ABN Amro commented: “Over the years, iwoca has demonstrated that digital lending to SMEs in Germany fills an important market gap and can be scaled sustainably.”

Iwoca operates in the UK and Germany and, since its founding in 2012, has disbursed around €7bn to SMEs.