SME lender raises new £200m funding line after reaching £2.5bn in finance lent

iwoca, one of Europe’s largest SME lenders, has announced a new funding line with initial commitments of £200m from Barclays and Värde Partners.

In January this year, iwoca secured an increase and extension to its existing funding line, with long-standing partner Pollen Street Capital, from £125m to £170m, as demand for SME finance ‘soared’. With the new £200m funding line from Barclays and Värde, this now takes the total debt commitments to over £850m.

As high-street banks reduce access to capital for SMEs, this funding line equips iwoca to meet the growing SME demand for working capital. According to iwoca’s Q2/23 SME Expert Index, more than four in five brokers (84 per cent) say high street banks are reducing their appetite for funding SMEs. This increased by 7 percentage points since Q1 2023.

A similar proportion of SME finance experts (81 per cent) predict demand for finance for SMEs will increase by the end of the year, indicating that the funding gap for SMEs is set to widen without support from alternative lenders.

Across the UK and Germany, iwoca has lent over £2.5bn since its launch in 2012 across more than 120,000 business loans. As of Q3 2023, the lender 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 as diverse as construction (15 per cent of total funding); retail (11 per cent); and manufacturing & food production (10 per cent).

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

Aneek Mamik, Global Head of Financial Services & Diversified Private Credit at Värde Partners, 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.”

By Matthew Neville – Senior Correspondent, Bdaily

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