UK business lender iwoca has secured a new £250 million debt facility, giving the fintech more room to lend as small and medium-sized businesses look for larger amounts of working capital.
The funding structure involves Waterfall Asset Management, also known as WAM Capital, and an unnamed leading UK bank. iwoca said the facility can grow alongside demand rather than operating as a fixed pool of capital.
That detail matters. Demand is not merely increasing in volume. Businesses are applying for considerably larger loans than they were a year ago.
The iwoca £250 Million Debt Facility Targets UK SMEs
iwoca plans to use the new facility to expand its lending capacity across the United Kingdom. The company provides flexible business finance for SMEs covering needs such as equipment purchases, operational expansion and short-term growth opportunities.
It is debt funding, not a conventional equity investment. The capital will support loans issued to iwoca customers rather than give the participating institutions an ownership stake in the fintech.
Waterfall Asset Management has previously worked with iwoca, while the identity of the UK bank involved in the latest transaction has not been publicly disclosed. The structure has also been designed to expand as borrowing demand grows.
Larger Business Loans Are Becoming More Common
The timing is not accidental.
Loans worth between £50,000 and £100,000 represented 42% of SME finance applications recorded in iwoca’s SME Expert Index during the first quarter of 2026. During the same quarter of 2025, that range accounted for just 27% of applications.
That is a sharp shift in a relatively short period. Small businesses are not simply looking for emergency cash to cover a temporary gap. More are seeking meaningful amounts that could fund machinery, stock, hiring or a wider expansion plan.
The trend may continue. According to iwoca, 57% of brokers surveyed expect demand for business finance to increase over the next six months.
iwoca’s Lending Activity Jumped During 2025
iwoca entered the latest funding agreement after a busy year for its lending business.
The company issued approximately 58,000 loans worth more than £1.3 billion across the UK in 2025. That represented a 60% year-on-year increase in the value of its lending compared with 2024.
Its customer reach has widened as well. iwoca said the number of UK SMEs it has funded since launching in 2012 increased from 60,000 businesses in 2024 to 96,000.
Those figures help explain why another large facility was needed. A lender can have plenty of applicants and strong technology, but it still needs substantial institutional capital behind the loans it approves.
Institutional Investors Keep Backing Alternative SME Lending
The £250 million agreement continues a string of debt funding transactions completed by iwoca over the past several years.
Its funding partners have included Lloyds, Citi, Barclays, Värde Partners, Pollen Street Capital and Insight Investment. In November 2024, the lender also secured a £200 million debt package from Citi and Waterfall Asset Management.
This is becoming a familiar model in fintech lending. Banks and asset managers supply the capital, while specialist platforms handle customer acquisition, underwriting and loan servicing.
For institutional investors, the arrangement provides exposure to SME credit without requiring them to build a new lending platform from scratch. For iwoca, it creates the financial capacity needed to approve more loans.
It is not risk-free, of course. Rapid growth only works when loan performance remains under control. Waterfall Asset Management said iwoca has expanded consistently while maintaining strong credit performance and adding products for its customer base.
Traditional Banks Still Leave a Financing Gap
Many viable small businesses struggle to obtain finance through conventional banking channels, particularly when they lack lengthy credit histories, substantial assets or predictable monthly income.
Fintech lenders have built much of their business around that frustration.
Instead of relying only on traditional credit scores and annual financial statements, alternative lenders can examine transaction histories, cash flow and recent trading performance. That can make the application process quicker and more responsive, although borrowers still need to look carefully at interest rates, repayment terms and the total cost of credit.
James Cuby, Waterfall Asset Management’s partner and head of Europe, said the new facility would unlock additional lending capacity for UK SMEs that remain underserved by traditional lenders.
What the Funding Means for iwoca
For iwoca, the immediate benefit is straightforward: more money available to lend.
The wider signal is more interesting. Large institutional backers appear willing to keep funding technology-led SME lending despite persistent uncertainty around business costs, interest rates and economic growth.
Romain Guilleminet, iwoca’s head of capital markets, said the company now supports thousands of SMEs and their communities each month. He added that the facility would allow it to serve more businesses with backing from established institutional partners.
The company will still need to balance expansion with credit discipline. A £250 million facility creates capacity, but it also raises the stakes. Approving more loans is the easy part. Maintaining repayment performance as volumes and average loan sizes rise will decide how valuable the deal eventually becomes.
UK SME Lending Is Moving Toward Bigger Tickets
The latest iwoca debt facility points to a change inside the UK business finance market.
Small companies appear increasingly willing—or increasingly required—to borrow larger sums. Inflation, higher operating expenses and more expensive equipment may be part of the explanation. Some businesses may also be borrowing for expansion after delaying investment during uncertain economic periods.
Whatever the reason, the lending opportunity has become large enough to attract another £250 million from institutional finance.
iwoca now has additional capital to chase that demand. The next test will be whether it can scale lending without weakening the credit performance that attracted those funding partners in the first place.