Business finance has changed significantly since the 2008
financial crash. Banks are no longer quite as willing to lend to smaller and
online businesses, particularly at short notice or in a pinch. This can make it
tricky to navigate the turbulent waters of getting established and expanding. Companies
need capital to take on new personnel, spend on marketing, and invest in developing
their offering. Securing such funding isn’t always easy. However, companies
such as iwoca are providing a much-needed service in that very niche. We look
at what the company offers in terms of business lending and how their process
Flexible business loans
All UK businesses
Between £1,000 and £200,000 (Max. £10k for startups)
Typically within days
Quick Look – Pros & Cons
Before we take a closer look at everything iwoca provides, it’s worthwhile highlighting some of the pros and cons of the service. Few providers are perfect, so naturally there are positives and negatives to using iwoca:
access to a variety of finance offers. Even if you’ve been turned away by
traditional lenders, you have a good chance of securing funding here.
service. User reviews of iwoca are generally positive, citing excellent
customer service and an uncomplicated experience.
use. The website makes the application process almost effortless, and
approvals are often swift.
for every business. There are some stipulations and requirements you have
to meet in order to qualify.
often high. As with many similar lenders, you’ll start paying interest
fairly quickly, meaning fees can soon mount up.
What is iwoca?
Essentially, iwoca is a company that provides flexible credit for small businesses. They have modelled their business with smaller and online companies in mind, allowing them to apply for credit quickly and easily via the iwoca website.
Their convenient and easy-to-use service makes borrowing money straightforward.
iwoca formed in 2012 and has grown to establish themselves
as one of the UK’s leading small business lenders. Initially, they started out
in the ecommerce market. However, they have since expanded to cover all types
of businesses. Their convenient and easy-to-use service makes borrowing money
The fintech company is London-based and was formed by CEO
Christoph Rieche and CTO James Dear.
How Does iwoca Work?
For what is usually a fairly complicated process, iwoca’s
website makes applying for business finance a straightforward undertaking. With
a few simple steps, you can send off your details for approval and have the
money within a few hours if you’re successful. We’ve outlined how the process works,
First, you’ll need to sign up for an account on
the iwoca website.
Next, you’ll have to fill in details about your
business and link your business account to iwoca. Alternatively, you can upload
your bank statements, company accounts, or VAT returns.
You can select when you wish to have the funds
available, and specify how much you want to borrow.
After you submit your application, one of
iwoca’s account managers will assess your information. They will then make a
decision based on the data you provided, usually within a few hours.
Once you have accepted the offer they give you,
you can access the funds and withdraw them to your business account.
The whole application process takes just a few minutes, and
there are no fees taken for the application. Once you have the money, you will
have 12 months in which to pay it back. Interest rates vary from 2% to 6% per
month depending on your circumstances.
What Features Does iwoca Have?
Despite the straightforward approach to business finance,
iwoca actually offer a good selection of features on their service. Some of the
most notable include:
Once you’ve got your money, you can pay it back whenever you like. Although interest rates are monthly, you only pay interest for each day you have the money.
Informed decisions. Unlike traditional banks, the iwoca account managers look at your business as a whole, rather than just a credit score. They take into account various details about your turnover, performance, and potential when making a decision.
Flexible loans. Once you’ve got your money, you can pay it back whenever you like. Although interest rates are monthly, you only pay interest for each day you have the money. So, you can pay it back early or top it up during the life of your loan. Best of all, there’s no fees to do so.
Fast and secure. The iwoca website is easy to use, and applications can be made within minutes. Not only is the website secure, but iwoca is also supported under the Loan Guarantee Facility legislation. This allows them to offer services to a wide range of business.
Part of the CCTA. iwoca is a member of the CCTA, meaning they adhere to certain guidelines surrounding consumer credit.
Wide range of loans. You can borrow between £1000 and £200,000 with iwoca, depending on the size of your company.
What Are the Fees for Using iwoca?
One of the nice things about iwoca is that they’re very
clear about what you’ll be charged for. Essentially, the application is free,
and there are no hidden fees. However, the interest rates can be a little steep
over the long-term. Interest rates start at 2% per month and range up to 6% per
So, for example, if you were to borrow £10,000 over 12
months, the representative APR would likely be around 49%. In this instance,
the total amount repayable would be £12,165, which is a little steep. Of
course, you may get a better or worse rate than this. Other similar providers,
such as Bitbond, have rates starting at
As with any such loan, business or personal, interest
payments can soon get the better of you. Always make sure that you can afford
to pay back the money you borrow.
Who is iwoca For?
If you run a small or medium-sized business, or if you’re a
sole trader, iwoca is for you. You can borrow between £1000 and £200,000
depending on the size of your company. Typically, your credit limit will be equivalent
to around one month’s revenue.
You can access iwoca’s features providing you have a
UK-based business and operate as a sole-trader, partnership or limited company.
If you run a startup, you can only apply for a maximum of £10,000.
So, if you’re an SME owner and you need a cash injection,
you can apply for credit with iwoca. Obviously, you’ll need to take into
account whether or not you can repay the loan with interest. However, providing
you can meet the APR of around 20-60% depending on circumstances, you’re good
What are the Drawbacks of Using iwoca?
As with all such services, there are some inevitable
downsides to iwoca. For example, even if you’re an established startup with a
relatively high turnover, the maximum you could borrow is £10,000. This can
seem quite restrictive if you’re already making a lot and want to expand.
Similarly, if you don’t quite meet the requirements, you
might be out of luck. iwoca do state on their website that they try and help
out in such circumstances, but there are no guarantees.
The interest rates are quite high, particularly when taken
over the course of a year. With interest accrued daily and charged weekly or
monthly, payments can soon get out of hand. Thankfully, there are no fees for
paying off your loan early.
How Safe is iwoca?
Privacy and security seem important to iwoca. They’re part
of the Consumer Credit Trade Association, and so abide by their rules. Although
a credit check is made when you apply, it only leaves a ‘soft-footprint’. This
means your credit score won’t be impacted by applying. However, a full credit
search is run if you accept their loan.
Although you have to link your online account or provide
business information, it’s never sensitive data. The iwoca website is secure,
so any information you submit is private.
Trustpilot gives iwoca an ‘Excellent’ rating across over
3,500 reviews. It’s clear that many customers have safely used the service for
Overall, iwoca are providing a valuable service to their
many customers. They’ve successfully lent over £500 million since they first
started out. The service that they provide is quick and easy to use, meaning
that you can safely apply for business financing on the iwoca website.
There’s a good amount of flexibility on offer here.
Businesses can borrow up to £200,000 depending on their size, and it’s free and
easy to repay early. Similarly, there are no fees for applying or topping up
On the downside, the interest rates seem a little high. With
an APR of 20-60% depending on your loan, things could soon get expensive. Also,
established startups may find the credit limit of £10,000 a little restrictive.
There’s a lot to like about iwoca, providing you meet the
requirements and can afford the repayments.