UK-based small and medium-sized enterprise (SME) lender iwoca has secured initial commitments of £200m from Barclays and Värde Partners in a new funding line.

The new debt facility will enable iwoca to address the rising SME demand for working capital.

Värde Partners financial services and diversified private credit global head Aneek Mamik said: “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.”

In January 2023, iwoca secured an increase and extension to its existing funding line with Pollen Street Capital. It was from £125m to £170m.

The new funding line takes the total debt commitments of the SME lender to more than £850m.

Launched in 2012, iwoca has lent more than £2.5bn across the UK and Germany.

The company said that its top-funded sectors are as diverse as construction, retail and manufacturing, and food production with 15%, 11% and 10%, respectively, of total funding.

iwoca CEO and co-founder Christoph Rieche 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. 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.”

According to the SME lender, it is reaching nearly three million businesses across the UK and Germany through its embedded lending technology.

The technology enables businesses to access loans directly through a range of platforms including accountancy software apps and digital neo-banks.

Iwoca also offers Flexi-Loan, an omni-channel business-to-business (B2B) payment solution iwocaPay and a revenue-based loan.

The revenue-based loan was launched in 2022 with eBay.