iwoca launches merchant cash advance product with Funding Xchange

Small business lender iwoca has partnered with Funding Xchange to launch an automated cash advance product, powered by Open Banking, for SME online sellers.

Iwoca said it is the first lender in the UK to offer fully-automated revenue-based repayments to e-commerce businesses with a business bank account on the marketplace.

The new ‘cash advance’ product will give small business owners, operating on platforms such as eBay, access to flexible revenue-based repayment loans of between £1,000 and £50,000 when trying to source a loan product on Funding Xchange’s online marketplace.

The loans are available for a fixed fee and with no interest, meaning that business owners repay what they have borrowed based on revenues, which iwoca calculates using Open Banking, taking a pre-agreed portion of that revenue to repay the loan.

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

“By transforming the credit-assessment and cost-to-serve, we deliver targeted, self-serve propositions to underserved segments. 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.”

Christoph Rieche, CEO and co-founder of iwoca, added: “Our vision is to provide finance to SMEs when, where and how they need it. We are transforming small business lending through product innovation powered by technology, combined with creative distribution partnerships.”

iwoca distributed nearly £400 million to small businesses through the government’s Coronavirus Business Interruption Loan Scheme (CBILS) and last year launched iwocaPay, an online ‘buy now, pay later’ invoice checkout to help small businesses get paid.