Embedded lending firm iwoca has raised new finance to meet a rising level of demand.
The firm has increased its funding line from £125 million ($153 million) to £170 million ($208 million) with Pollen Street Capital. It’s also increasing funding lines with other existing lenders, iwoca said in a Thursday (Feb. 2) press release.
iwoca is doing so after seeing the total number of small and medium-sized businesses (SMBs) it funded across the United Kingdom and Germany grow by 54% in 2022 compared to 2021, reaching 15,429 customers, according to the press release.
“Businesses up and down the country are in need of instant working capital to manage the increased pressure on their cash flow,” iwoca CEO and Co-Founder Christoph Rieche said in the release. “My co-founder and I started iwoca to fill this exact gap and we’re proud that we can step up and support thousands of small businesses every month.”
Small business loans have been becoming harder and more expensive to get in the United Kingdom.
The Financial Times reported in December that less than half of small business loan applications in the U.K. were successful during the third quarter of 2022 — down from nearly two-thirds of applications before the pandemic — and that the interest rates on the loans that were offered have risen.
iwoca’s embedded lending technology allows SMBs to access loans through accountancy software apps, digital neobanks and other platforms, according to the press release.
The company offers its Flexi-Loan core lending product in amounts up to £500,000 ($611,673), a limit it raised from £200,000 ($244,669) last year in response to growing demand from medium-sized businesses.
It also offers a Revenue-Based Loan in which businesses repay with a percentage of their monthly sales. This product was launched last year in cooperation with eBay, per the release.
“We are thrilled to extend and expand our partnership with iwoca to help provide much-needed access to capital to small businesses across the U.K. and Germany,” Pollen Street Partner Michael Katramados said in the release. “The new facility builds on our existing relationship with iwoca which began in 2016 and epitomizes our commitment to investments that drive positive impact, in this case the ability to support small businesses through a high-quality lending partner.”