European SME lender, iwoca has secured a new debt facility of £200 million from Barclays Bank PLC and Värde Partners which it says will help bridge the SME funding gap.
At a time when high-street banks have been reducing access to capital for SMEs, the company said the funding line will allow it to meet a growing demand for working capital.
According to iwoca’s Q2/23 SME Expert Index, more than four in five brokers (84%) say high street banks are reducing their appetite for funding SMEs. This has increased by 7 percentage points since Q1 2023.
Since iwoca’s launch in 2012, it has lent over £2.5bn across the UK and Germany including more than 120,000 business loans while its top-funded sectors, to date, are construction (15% of total funding); retail (11%); and manufacturing & food production (10%). Through its embedded lending technology, it allows businesses to access loans directly through a range of platforms from accountancy software apps to digital neo-banks.
Christoph Rieche, iwoca CEO and co-founder, said: “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.”
In January this year, iwoca secured an increase and extension to its existing funding line, with long-standing partner Pollen Street Capital, from £125 million to £170 million, as demand for SME finance soared. With the new £200 million funding line from Barclays and Värde, this now takes the total debt commitments to over £850 million. According to the lender, it is on track to end the year having doubled the number of small business loans it has funded compared to 2021.