iwoca lands £250m funding line as demand for larger SME loans jumps

UK small-business lender iwoca has secured a new £250m debt facility from an unnamed leading UK bank and Waterfall Asset Management, expanding its capacity to fund SMEs as demand shifts towards larger loan sizes.

The structure is designed to increase as lending demand grows, giving iwoca additional flexibility to finance businesses investing in equipment, expanding operations or responding to short-term commercial opportunities. The company did not disclose the facility’s maturity, pricing or the identity of the participating bank.

The transaction follows a sharp increase in iwoca’s UK lending. The lender issued 58,000 loans worth more than £1.3bn during 2025, representing a 60% year-on-year increase in lending value. It says the number of UK SMEs it has financed since 2012 has risen from 60,000 in 2024 to 96,000.

Its latest SME Expert Index also points to businesses seeking larger amounts of capital. Loans between £50,000 and £100,000 accounted for 42% of applications during the first quarter of 2026, compared with 27% in the equivalent period last year. Fifty-seven per cent of brokers surveyed expect demand for this segment to increase further over the next six months.

For iwoca, securing a scalable institutional funding structure is important because the lender must maintain sufficient capital to support loan origination while managing credit performance across a growing portfolio. The new agreement adds to funding previously supplied by institutions including Lloyds, Citi, Barclays, Värde Partners, Pollen Street Capital and Insight Investment.

Waterfall said its decision to extend the relationship reflected iwoca’s record of growth, credit performance and product development. The investment manager has previously participated in iwoca funding programmes, including a £200m package announced with Citi in 2024.

The facility arrives as UK SMEs face continued pressure from operating costs, uncertain demand and tighter conventional bank lending criteria. For alternative lenders, the opportunity is increasingly moving beyond small emergency loans towards larger facilities used for expansion and investment.

The commercial test will be whether iwoca can maintain underwriting quality as origination volumes and average loan sizes rise. The £250m commitment nevertheless gives the lender substantial additional firepower and signals continued institutional appetite for technology-enabled SME credit.