New analysis by Capital Economics, commissioned by SME lender iwoca, indicates that small and medium-sized enterprises (SMEs) accessing loans may experience a 19% increase in monthly revenues within a year, compared to businesses that do not receive financial support.
The study, which draws on current account data from thousands of iwoca customers, is described by Capital Economics as the first of its kind to quantify the revenue impact of SME lending.
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Andrew Evans, Deputy Chief Economist at Capital Economics, noted that the findings demonstrate “just how powerful access to finance can be for small firms,” with the data showing a “nearly 20%” rise in account inflows following receipt of a loan.
The report also outlines structural changes in the SME lending market over the past decade. In 2012, the UK’s five largest banks accounted for approximately 60% of SME lending. That share has since declined, with challenger and specialist banks now representing the majority. iwoca’s own market share has increased from 1 in every 1,000 SME loans in 2022 to over 3.5 in every 1,000 in 2024.
To address growing demand, iwoca has pledged £1.5 billion in new lending to UK SMEs by the end of 2026. This includes £300 million earmarked for construction firms, intended to support delivery of the government’s housing target of 1.5 million new homes by 2029.
According to the report, iwoca has lent over £4.5 billion to 100,000 UK businesses since its launch in 2012. In the past year alone, its lending is estimated to have supported £2.8 billion in gross value added (GVA) and nearly 50,000 jobs. The company reports that 75% of its loans in the last year went to firms based outside London.
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By GlobalDataChristoph Rieche, iwoca’s CEO and co-founder, said the findings “prove what we see every day”, that when SMEs can access finance, they are more likely to grow and hire. He added that access to finance should be viewed not only as a business issue but also as “a productivity issue for the whole economy.”
Evans suggested that the data provides “evidence that flexible, fast lending” from non-bank providers is contributing to broader economic outcomes, including increased output and tax revenues. He added that as awareness of these lenders grows, their role in supporting UK productivity could expand further.
