iwoca, an online lending startup for SMBs, raises £100M to support SMBs looking for financing via the UK's Coronavirus Business Interruption Loan Scheme
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Context & Ripple Effects
iwoca has been building distribution partnerships in UK SMB fintech since its loan program with challenger bank Tide in 2017, which offered SMBs up to £100K through a mobile-first channel outside the big banks. The new £100M raise points that capital at the government's Coronavirus Business Interruption Loan Scheme, positioning iwoca as an origination-and-funding pipe for state-backed pandemic credit.
The deal lands mid-surge in London SMB lending: Selina Finance closed a $53M round just two weeks earlier (leveraging business owners' home equity), and MarketInvoice had already pulled Barclays and Santander in as Series B leads. Capital is racing toward whichever non-bank lender can move government-guaranteed volume fastest.
First-order effects
- iwoca can now underwrite and fund CBILS applications at scale immediately, giving UK SMBs locked out of high-street bank credit a working alternative while the scheme runs.
- Tide and similar SMB platforms gain a better-capitalized lending partner, since iwoca's balance sheet — not theirs — absorbs the funding constraint on embedded loan offers.
Second-order effects
- Selina Finance and other London SMB lenders face pressure to secure comparable debt facilities or scheme accreditation of their own, or cede the pandemic-credit origination race to iwoca.
- High-street banks lose a measure of gatekeeping over CBILS flow as government guarantees de-risk non-bank balance sheets, pushing them to compete on speed and bundling rather than access.
Third-order effects
- If guaranteed-scheme lending proves the model, UK SMB finance structurally shifts toward specialized online lenders originating government-backed credit — with the next stress test being what happens to those balance sheets when schemes like CBILS wind down.
- The pattern generalizes across markets: KoinWorks' later debt-heavy raise shows emerging-market SMB P2P lenders converging on the same equity-plus-debt stack to fund SME credit at scale.
The trend: SMB lending is consolidating around non-bank fintech balance sheets that pair venture equity with debt facilities to originate government-guaranteed small-business credit faster than incumbent banks.