iwoca said to raise £100m as it looks to increase loans issued under the coronavirus business support scheme

August 3, 2020

Small business loan provider iwoca has reportedly raised £100m in funding to increase its capabilities as a Coronavirus Business Interruption Loan Scheme (CBILS) provider.

The funding was supplied by an unnamed investor, according to a report from Business Cloud.

CBILS is a government scheme which aims to supply financial support to small businesses across the UK that are struggling because of the Covid-19 pandemic. The British Business Bank is operating the scheme through more than 90 accredited lenders, which include high-street banks, challenger banks, asset-based lenders and smaller specialist local lenders.

Lenders can provide a maximum of £5m through term loans, overdrafts, invoice finance and asset finance, with loans less than £250,000 not requiring a personal guarantee. To incentivise lenders to issue loans, the government is guaranteeing the loan repayments.

iwoca believes there are still masses of eligible companies which have yet to apply for a loan or have been declined. As a result, it has called on the UK’s largest banks who cannot serve businesses to refer them to iwoca, particularly those which have been waiting for more than two weeks, the article said.

Iwoca CEO Christoph Rieche told Business Cloud, “We want to give small businesses the best chance of finding the support they so clearly need, which means the banks must work with us.

“It’s not acceptable that thousands of the businesses applying for CBILS are left hanging for weeks or even months without getting a decision from their bank. As an industry we have a joint responsibility in supporting this effort so that SMEs can access finance fast to survive and thrive.”

iwoca has received a lot of capital this year. Before the CBILS scheme was even formed, the firm reportedly raised €100m in debt capital to help it finance more loans.

The execution of the CBILS and the Bounce Back Loan Scheme (BBLS), a similar initiative, have been a little hit and miss. Starling Bank, one of the accredited lenders, came under heavy fire from consumers after many businesses found their BBLS applications declined.