iwoca pledges £220m for struggling SMBs in Northern England
Research conducted by London-based fintech iwoca has determined that the North of England could lose up to 14 years of economic growth because of COVID-19.
Specific GVA loss forecasts include the North East (-11.7%), North West (-11.2%), and Yorkshire and the Humber (-12%). Notably, these represent 50% of the six worst affected regions in the country.
As such, iwoca has decided to pledge £220m in loans for small businesses by the end of 2023.
Driving growth and helping business
Established in 2011, iwoca was founded by Christoph Rieche (CEO) and James Dear (CTO) on the basis of delivering bespoke loans to enterprises that struggle to access finance from larger banks.
Utilising machine learning algorithms, the company is able to quickly assess a client’s viability through data collected from bank accounts, online platforms and ecommerce specialists like PayPal.
Its efforts to assist the pandemic-stricken North are reminiscent of a previous pledge in 2018 to donate £100m by 2020, a goal it decisively achieved almost one year early.
Reflecting on the economic straits currently being experienced by Northern English business and the importance of iwoca’s mission, Rieche said:
“Small businesses around the country have been hit hard by the pandemic, but it's clear that some parts of the country - particularly the North - are suffering disproportionately.
“We want to support business owners in these areas to give them the best chance of recovery over the next few years. With this financial commitment, we hope that we can drive up growth and help businesses across the North thrive.”
The importance of SMBs
Post-lockdown analysis by McKinsey has made it clear that SMBs (small-medium businesses) are the bedrock of the UK’s economy, representing approximately 50% total.
However, intolerable cash flow pressures and other financial pressures continue to place these forms of enterprise at a disproportionate disadvantage.
Combined with iwoca’s insights, the business case for supporting and protecting small businesses in the UK and around the world is strong. Indeed, it could be argued that no significant recovery from the pandemic will be possible until these issues are addressed.
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