This development comes as the company continues to expand its financial resources. In January 2023, iwoca had already increased and extended its existing funding line in collaboration with Pollen Street Capital, a long-standing partner, from GBP 125 million to GBP 170 million. This adjustment was made to accommodate the growing demand for SME financing. With the additional GBP 200 million funding from Barclays and Värde Partners, iwoca's total debt commitments now exceed GBP 850 million.
According to the official press release, this funding holds particular significance as it addresses the growing need for working capital among SMEs, which is becoming more challenging due to reduced access to capital by traditional high-street banks. According to the Q2/23 SME Expert Index by iwoca, 84% of brokers reported that high street banks are decreasing their willingness to fund SMEs, which represents a 7% increase when compared to Q1 2023.
The same source reveals that approximately 81% of SME finance experts predict an increase in demand for SME financing by the end of 2023. Representatives from iwoca emphasised the company's commitment to supporting SMEs during economic uncertainty. They highlighted the important role that these small businesses play in a robust economy and expressed the company's readiness to assist them in achieving their goals.
Officials from Värde Partners expressed their support for iwoca's expansion and the enhanced commercial financing opportunities it brings to the UK market. Värde Partners recognised the quality of iwoca's portfolio and its ability to serve underserved parts of the economy.
It's worth noting that iwoca's lending activity has been diverse, with sectors such as construction, retail, manufacturing and food production being the top recipients of funding at 15%, 11%, and 10% respectively.
iwoca's reach extends to millions of businesses in the UK and Germany through its embedded lending technology. This technology allows businesses to access loans directly through various platforms, including accountancy software apps and digital neo-banks. Apart from its Flexi-Loan offering, iwoca provides an omnichannel B2B payment solution, iwocaPay, and a Revenue-Based Loan introduced in partnership with eBay in 2022, where repayments are tied to a business's monthly sales.
Overall, iwoca aims to promote economic growth by broadening financial possibilities for small business owners. Since its inception in 2012, the company has facilitated over GBP 3.5 billion in financing for more than 100,000 businesses while raising more than GBP 850 million in equity and debt finance.
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