Fintech lender iwoca gets another £200m to support SMEs

Fintech lender iwoca has raised another £200m in debt financing to support Europe's small businesses, which are facing financial pressure from all angles

SME lender iwoca has today announced a new funding line worth £200m, which will allow it to continue meeting demand for working capital among Europe’s small-and-medium-sized businesses.

The debt facility, provided jointly by Barclays Bank and Värde Partners, is the second such funding line extended to the fintech this year. In January, iwoca expanded its existing funding line with Pollen Street Capital from £125m to £170m as demand from SMEs soared. It brings the total debt commitments available to the lender to over £850m, and coincides with iwoca achieving net profitability for its fourth consecutive quarter.

The milestone comes as many European businesses – particularly those with the least resources – struggle to get access to good quality capital, with the fundraising environment drying up and financial considerations like high interest rates and inflation continuing to affect their day-to-day liquidity.

Indeed, according to the company’s own research, more than four out of five brokers (84%) see high street banks tightening their belt and reducing their appetite for funding SMEs – seven percentage points higher than the same figure from the first quarter of this year. Experts expect that funding gap to widen, but, armed with this latest arsenal, iwoca wants to be the ray of light that small business owners can turn to.

SME lender iwoca ‘will be there for SMEs that need them’

It has lent over £2.5bn since its launch in 2012 to nearly 3m businesses across the UK and Germany, delivering over 120,000 business loans. Construction, retail, manufacturing and food production are the industries most funded by the firm, which utilises embedded lending to deliver capital where it’s most convenient to businesses – such as their accountancy software or directly through neobanks.

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

“We are pleased to support the expansion of commercial financing opportunities in the UK through iwoca,” adds Aneek Mamik, Global Head of Financial Services & Diversified Private Credit at Värde Partners.

“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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