iwoca and Funding Xchange launch automated merchant cash advance

By Joy Dumasia

iwoca, one of Europe’s largest small business lenders, has launched its industry-first cash advance product on Funding Xchange for small business online sellers. iwoca will be the first lender in the UK using Open Banking to offer fully automated revenue-based repayments to e-commerce businesses with a business bank account on the marketplace.

Small business owners operating on platforms such as eBay can access flexible revenue-based repayment loans of between £1,000-£50,0001 when trying to source a loan product on FundingXchange’s online marketplace.

iwoca will calculate the monthly repayments based on the business’ revenues and take a pre-agreed portion of that revenue to repay the loan. Building on iwoca’s heritage of bringing flexibility to SME lending, the new Cash Advance product will, for the first time, enable SMEs to choose a loan repayment profile that mirrors their trading ups and downs, allowing for maximum flexibility during interruptions in operation or seasonal dips. As Open Banking powers the loan, it will have mass-market potential.

Christoph Rieche, CEO and co-founder at iwoca, said: “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. 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 e-commerce sellers. 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.”

Recently, IBS Intelligence reported that new data from iwoca, one of Europe’s largest small business lenders, reveals how embedded finance will play a vital role for small businesses as they look to recover from the pandemic.