Iwoca secures GBP £250 million facility for SME lending

Iwoca has closed a £250 million funding structure with a UK bank and Waterfall Asset Management to support additional lending to small businesses across the UK.

The facility follows a sharp rise in borrowing demand from small and medium-sized enterprises, with the value of Iwoca's UK lending up 60% in 2025 from the previous year.

The new arrangement is designed to expand as demand grows. It adds to a series of debt funding deals completed over the past two years with backers including Lloyds, Citi, Barclays, Värde Partners, Pollen Street Capital and Insight Investment.

Iwoca issued 58,000 loans worth more than £1.3 billion across the UK in 2025. The number of SMEs it has funded since 2012 has risen to 96,000, up from 60,000 in 2024.

Its latest SME Expert Index points to a shift towards larger borrowing requests. Loans between £50,000 and £100,000 made up 42% of all applications in the first quarter of 2026, up from 27% in the same quarter a year earlier.

The trend is also reflected in broker expectations, with 57% expecting demand for mid-sized finance to increase over the next six months, according to the index.

Demand trend

The data offers a snapshot of a part of the lending market where non-bank lenders have sought to expand their role. Smaller businesses have often faced tighter credit conditions from traditional lenders, particularly when seeking unsecured or more flexible finance.

Iwoca, which describes itself as one of Europe's largest SME lenders, has built its presence in that market over more than a decade. The business was founded by James Dear and Christoph Rieche to serve small companies seeking quicker decisions and less paperwork than they typically encountered at large banks.

The company now employs around 400 people in London and Frankfurt. Its latest funding structure suggests institutional investors remain willing to provide capital to specialist lenders that can demonstrate sustained loan growth and stable credit performance.

Romain Guilleminet, head of capital markets at Iwoca, said the facility would help the lender expand support for UK businesses.

"We're proud to have now grown to a size where we make a material impact on thousands of SMEs and their communities every month. This facility means we can offer more businesses the kind of support they're looking for, backed by some of the best institutional partners in the market. We're delighted to be working with another leading UK bank and Waterfall - their confidence in our approach means a great deal, and together we can make a real difference to UK businesses," he said.

Waterfall Asset Management said the agreement extends an existing relationship with the lender and pointed to the funding gap many smaller firms face through mainstream banks.

"We are excited to extend our funding relationship with iwoca through this new facility, unlocking further lending capacity for UK SMEs that are chronically underserved by traditional lenders. iwoca has been able to deliver growth consistently year after year, whilst maintaining strong credit performance and expanding its product offering for its client base," said James Cuby, partner and head of Europe at Waterfall Asset Management.

The latest facility underlines how lenders focused on SMEs are responding to stronger demand for larger loan sizes as businesses seek funds for expansion, equipment purchases and other growth plans.