Iwoca and Funding Xchange team up to launch cash advance product for SMEs

Look after the pennies and the pounds will look after themselves is a phrase many of us will know. But, now, for UK SMEs a new team is in town to give them a helping hand.

Alternative business lender Iwoca and SME lending marketplace Funding Xchange have teamed up to launch the UK’s first fully automated cash advance product for online SMEs, powered by open banking.

SMEs trading via platforms like eBay or Shopify can now access Iwoca’s flexible loans of between £1,000-£50,000 through Funding Xchange’s marketplace, with repayments automated based on their monthly revenues.

“With our new cash advance product and Funding Xchange partnership, we continue our proud track record of industry firsts. Just under ten years ago, we were the first UK company to integrate with eBay and Amazon to provide instant credit decisions for eCommerce sellers,” Christoph Rieche, CEO and co-founder of Iwoca said.

“We were also the first business lender to offer a lending API—which has now been used by over 20 major fintech partners, and the first SME lender to connect to the UK’s nine largest banks with Open Banking.”

eCommerce SMEs will be able to access the loan for a one-time fixed fee and will pay no interest, only repaying what they’ve borrowed based on their trading revenue.

Firms will also be able to shape their repayment plan to match their ups and downs, meaning they will repay less during seasonal dips or interruptions in their operations.

“Iwoca and FundingXchange are leaders in the use of intelligent technology to make SME funding more accessible, more affordable and more sustainable,” Katrin Herrling, CEO and co-founder of Funding Xchange added.

“Given the challenges that the crisis has created for small businesses, this partnership is delivering critical access to finance to help businesses rebuild and flourish.”

Despite taking longer than some of its peers to become accredited, Iwoca dished out nearly £400m to SMEs through the Coronavirus Business Interruption Loan Scheme (CBILS) and has applied to the Recovery Loan Scheme but is yet to get the seal of approval.

Just over a week ago, Funding Xchange embedded its lending marketplace on eBay’s new embedded finance marketplace Capital for eBay Business Sellers (CEBS), helping its sellers access funding all in one place.

In just three months since its launch,  2,700 small businesses have borrowed £25.4m through CEBS.