iwoca, one of the largest small business lenders in Europe, launched its ‘industry first’ cash advance product on Xchange financing for small online sellers.

iwoca is reportedly the first UK lender – leveraging Open Banking – to provide fully automated, income-based repayments to digital commerce businesses that maintain a professional bank account in the market.

As mentioned in a statement shared with CI:

“From today, small business owners operating on platforms like eBay can access flexible income-based repayment loans between £ 1,000 and £ 50,000 1 when trying to find a loan product in FundingXchange’s online marketplace. “

This is how it works:

With a fixed fee and no interest on the loan, business owners are able to repay what they borrow “based on income.” Using Open Banking technology, iwoca “will calculate monthly repayments based on the company’s income and take a pre-agreed portion of that income to pay off the loan,” the announcement explained.

Build on iwoca Legacy of offering greater flexibility to small business loans, the new Cash Advance product “will for the first time allow SMEs to choose a loan repayment profile that reflects their highs and lows – allowing maximum flexibility during interruptions operating or seasonal lows. As the loan is powered by Open Banking, it will have mass market potential, ”the update revealed.

Improving access to finance is essential to help SMEs “bounce back from the COVID-19 crisis,” the statement noted, while adding that through this partnership, iwoca “will provide flexible cash advances to SMEs to mitigate the cash flow problems and allow quick access to finance. “

Christoph Rieche, CEO and co-founder of iwoca said:

“Our vision is to provide finance to SMEs when, where and how they need it. We transform small business lending through technology-powered product innovation combined with creative distribution partnerships.

He added:

“With our new cash advance product and Funding Xchange partnership, we continue our proud record of industry firsts. Just under a decade ago, we were the first UK company to integrate with eBay and Amazon to provide instant credit decisions to online sellers. We were also the first commercial lender to offer a lending API – which is now used by over 20 major fintech partners, and the first SME lender to connect to the UK’s nine largest banks with Open Banking. “

Katrin herrling, CEO and co-founder of Funding Xchange, said:

“Iwoca and FundingXchange are leaders in using smart technologies to make financing for SMEs more accessible, more affordable and more sustainable. By transforming credit scoring and cost of service, we deliver targeted self-service proposals to underserved segments. Given the challenges the crisis has created for small businesses, this partnership provides essential access to finance to help businesses rebuild and thrive. “

iwoca has distributed nearly £ 400million to small businesses through the Coronavirus Government Business Interruption Loan Program (CBILS) and last year it introduced iwocaPay – a Buy Now Pay Later or BNPL online payment system to help small businesses receive payments.

Lender “reaches 1.8 million businesses in the UK and Germany with its integrated lending technology, which enables businesses to access loans through a range of platforms such as accounting software applications and digital neo-banks “.

iwoca has also partnered with Mental Health UK on research to ‘identify the needs of small business owners and will soon launch a tailored mental health support program’.