iwoca business loans: how the Flexi-Loan works, what it costs and who qualifies

iwoca's main product is the Flexi-Loan, an unsecured business loan that behaves more like a credit line than a term loan. You're approved for a limit, you draw down what you need, and you pay interest only on the amount you've actually taken and only for the days you hold it.

You can borrow from £1,000 to £1,000,000, for anything from a single day to 5 years. There are no early repayment fees. Pricing is quoted per 30 days rather than per year, which is the detail that trips people up when comparing iwoca against anyone else.

This guide covers how the iwoca Flexi-Loan works, what it costs, who qualifies, what to make of the reviews, and where it sits against a conventional term loan.

All iwoca product details below are taken from its Flexi-Loan page and published FAQs, and were correct as of September 2026. Rates, fees and eligibility can change, so check the current position directly with iwoca before applying.

What is iwoca?

iwoca is a UK non-bank lender founded in 2012, focused on small and medium-sized businesses.

Since it’s not a bank, that means no current account requirement, no branch network, and a lending decision based on your business performance rather than a relationship.

Alongside the Flexi-Loan, iwoca offers a business credit card and iwocaPay, a checkout tool that lets business customers pay an invoice in installments.

How the iwoca Flexi-Loan works

The Flexi-Loan works differently to a standard small business loan, with a focus on short-term lending. You apply once and get approved for a credit limit. From there:

• You transfer money to your bank account as you need it, rather than receiving a single lump sum

• Interest accrues daily, and only on what you've drawn down

• You repay weekly or monthly, depending on the schedule agreed when you request funds

• You can repay early at any point with no fee, which reduces the interest you pay

• Once you've repaid enough of the balance, you can apply to top up

You can top-up once you have repaid a third of the original amount on a 12-month term, or 15% on terms of 13 months or more. 

Repayments are collected automatically from a registered debit card, and you can also repay by bank transfer or through the online account.

What an iwoca business loan costs

iwoca publishes that its business loan interest rates start at 1.5% per 30 days, charged on the outstanding balance for the days you're using the money. Borrowing for longer than 12 months can bring an additional fee. iwoca states this is typically 5% for terms of 13 to 24 months and 6% for longer.

When comparing rates between lenders, it’s worth remembering that a representative APR is the rate a lender expects to offer at least 51% of successful applicants. Your own rate depends on your circumstances and may be higher, and any lender must tell you your actual rate before you commit.

Rates, fees and eligibility vary between lenders and change over time. Check current terms with each provider directly rather than relying on a comparison written at a point in time.

Who can apply for an iwoca loan

Published criteria from iwoca are that you're 18 or over, based in the UK, and trading as a limited company or LLP, with no firm rule on turnover. However, it is important to check their website for absolute clarity. 

That matters. Most business lenders set a trading floor of a year or more and a turnover threshold. iwoca not doing so opens the door to younger businesses that would be declined elsewhere, and it's the clearest structural difference between iwoca and most of the market.

A personal guarantee from a director is required. Documentation is typically bank statements, sometimes company accounts and VAT returns, with no business plan or forecasts needed.

How to decide whether an iwoca loan is right for your business

If you don't know exactly how much you'll need or when, drawing down in stages and paying interest only on what you use can be helpful for managing your cash flow. 

Iwoca loans are also built for speed, and potentially for businesses that may not meet other lenders criteria, since they don’t have a minimum trading history.

However, if you know you need a specific sum for a specific purpose over several years, a term loan gives you a fixed repayment you can budget against, and pricing structured around an annual rate is easier to compare and forecast. 

How a Flexi-Loan compares with a Funding Circle business loan

How Funding Circle can help

Funding Circle business loans are designed to give you the certainty you need: you know the sum, you know the term, and you want a repayment figure you can put in a forecast.

• Borrow £10,000 to £750,000 over 6 months to 6 years

• Rates from 6.9% per year, quoted annually and fixed for the term

• Fixed monthly repayments, so the number doesn't change if the base rate moves

• No additional fee to overpay or to settle early in full, so flexibility costs you nothing if your plans change

• Limited companies and LLPs can get a decision without affecting their credit score

• Unsecured loans available, without putting up property or other assets as security

Use the business loan calculator to see what you'd repay before you apply. Applications take around 7 minutes and approved loans are typically funded within 48 hours. A personal guarantee is required if you're approved, and we recommend taking independent legal advice before signing one.

If you’re looking for a flexible finance line, FlexiPay lets you pay virtually any business cost upfront, by card or by transferring funds straight to a supplier, then spread it over 1 to 12 months for a flat fee from 1.99% per use, with no interest. Note, 1 to 12 month payment term is only available to those who took out Flexipay after July 2024. 

For everyday spending, the Cashback business credit card pays 2% cashback on all card purchases for the first 6 months or up to £2,000, whichever comes first, then 1% uncapped after that, with no annual fee.

Iwoca business loan FAQs

How much can I borrow from iwoca?

The Flexi-Loan runs from £1,000 to £1,000,000, over terms from a single day to 5 years. The amount you're offered depends on your business performance rather than a fixed formula.

What is iwoca's interest rate?

iwoca publishes that rates start at 1.5% per 30 days, charged only on the balance you've drawn down and only for the days you hold it. Borrowing beyond 12 months can carry an additional fee, typically 5% for 13 to 24 months and 6% for longer. Your own rate depends on your circumstances.

Does applying affect my credit score?

iwoca states that applying won't affect your credit score. With Funding Circle, limited companies and LLPs can get a decision without affecting their credit score. Always check what kind of search a lender runs before you apply.

Can I repay an iwoca loan early?

Yes, with no fee. Because interest accrues daily on the outstanding balance, repaying early reduces what you pay overall.

Disclaimer

26/09/26 – While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.