SME Lender iwoca Secures GBP 270 Million from Citi and Barclays

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UK-based small business lender iwoca has announced securing a new GBP 270 million package of debt funding, marking a significant milestone in the company’s growth trajectory and bringing its total gross investment to over GBP 1 billion.

The funding comprises GBP 150 million in debt financing commitments from Citibank and Insight Investment to support iwoca’s expansion in Germany, along with an additional GBP 120 million from Barclays and Värde for the UK business. This substantial investment underscores iwoca’s commitment to addressing the growing demand for finance from small businesses in both markets.

Since its establishment in 2012, iwoca has been a vital lender in the SME lending landscape, providing over GBP 3 billion in loans to businesses in need of working capital in the UK and Germany. Notably, the company has surpassed its previous lending records, with over GBP 200 million lent across 9,000 business loans in the UK and Germany during the first quarter of 2024 alone.

iwoca’s success can be attributed to its innovative approach to SME lending, leveraging embedded finance technology, and establishing strategic partnerships with platforms like Qonto and Countingup. This enables businesses to access loans directly, circumventing the traditional banking model.

The increased funding for iwoca comes at a critical time when high street banks are reducing their funding to SMEs, creating a significant funding gap. iwoca’s Flexi-Loan, known for its rapid lending decisions and flexible terms, has emerged as a lifeline for small businesses excluded by traditional banks, especially those with limited trading histories.

Officials from iwoca emphasise that this investment will enable them to meet the surging demand for finance among SMEs, further solidifying their position as a leading provider of innovative lending solutions tailored to the needs of small businesses in the UK and Germany.