iwoca: how it works and what it costs

A flexible credit line from £1,000 to £1,000,000. Draw what you need, pay interest only on what you use.

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How it works

iwoca's product is the Flexi-Loan, and it behaves more like a credit line than a traditional loan. You get approved for an amount between £1,000 and £1,000,000, capped at up to 20% of your turnover. You then draw down only what you need, when you need it. Interest builds daily, and only on the balance you actually owe. Draw £20,000 of a £50,000 facility and you pay interest on £20,000, not £50,000.

You apply online. iwoca runs a soft credit check at this stage, which is invisible to other lenders, so getting a decision leaves no mark on your file. A hard check only happens if you go ahead and take the loan. iwoca says it gives an approval decision within 24 hours.

Once approved, funds typically arrive within hours. Eligibility covers UK limited companies and partnerships, and iwoca states no minimum trading time or turnover. Expect to be asked for a personal guarantee, which makes you personally liable if the business cannot repay. Our guide to personal guarantees explains what that means in practice.

Repayment is where the flexibility shows. Because interest accrues daily on the outstanding balance, the faster you clear it, the less you pay. There is no early repayment fee. iwoca's own words: "If you want to repay early that's great. We'll never charge a fee for that."

Watch the length, though. Loans longer than 12 months add a fee, typically 5% for 13 to 24 months and 6% beyond that. So stretching the term costs you twice, once in extra interest and once in the fee.

Here is the honest translation of the headline rate. Interest "starts at 1.5% per 30 days", which means £150 per 30 days on every £10,000 outstanding, or roughly 18% over a year before compounding. That is the best case. The representative APR is 49%, so a typical borrower pays well above the starting rate.

What it really costs

iwoca quotes its rate in 30-day chunks: "Our business loan interest rates start at 1.5% per 30 days". The word to notice is "start". That is the floor, not what most people pay.

The rate in iwoca's representative example on its Flexi-Loan page, at the time of checking: "3.33% interest per 30 days (49% APR representative)". iwoca adds: "At least 51% of customers who take out a loan of £25,000 or less receive our Representative APR or a lower rate." The example also shows a monthly repayment and a total repayable in pounds. Those two figures depend on the loan size and term iwoca puts in the example, and iwoca can change the example at any time, so take them from iwoca's own page rather than from us.

In plain English: the representative rate is 3.33% per 30 days, more than double the advertised starting rate, and it works out at a 49% APR. At 3.33% per 30 days, every £10,000 left outstanding costs about £333 per 30 days. And that 51% line cuts both ways. Of customers borrowing £25,000 or less, up to 49 in 100 pay more than the representative rate.

Two more things shape the real cost. Loans longer than 12 months add a fee, typically 5% (13 to 24 months) or 6% (longer). And repaying early costs nothing, which genuinely matters here. Interest builds daily on the balance, so the Flexi-Loan is at its cheapest when you are in and out fast, and at its most expensive when a balance sits there for a year.

Check the current figuresLenders change pricing without notice. The representative example on iwoca's own site is the number that counts.

Who can apply

• UK limited companies and partnerships
• No stated minimum trading time or turnover
• Borrowing capped at up to 20% of turnover
• Expect to be asked for a personal guarantee
• Soft credit check to apply, hard check only if you take the loan

Good for

• Short, sharp cash gaps you can clear quickly, since interest builds daily and early repayment is free
• Businesses that want a facility to dip into rather than one fixed lump sum
• Checking your price without marking your credit file, because the application check is soft
• Newer businesses, as iwoca states no minimum trading time or turnover

Watch out for

• The advertised 1.5% per 30 days is a starting rate. The representative APR is 49%, and on loans of £25,000 or less, up to 49 in 100 customers pay more than that.
• Rates quoted per 30 days look small. Even the lowest rate, 1.5% per 30 days, works out at roughly 18% over a year before compounding.
• Loans longer than 12 months add a fee, typically 5% (13 to 24 months) or 6% for longer. On £100,000 that is £5,000 or £6,000 on top of the interest.
• Expect to be asked for a personal guarantee. If the business cannot repay, you are personally on the hook.
• The lending itself is unregulated commercial lending, so you do not get the protections that come with FCA-regulated consumer credit.

How iwoca compares

iwoca is the flexibility play. It is fast, drawn down as needed and free to repay early, but the representative APR is 49%. A fixed-term loan works the other way round: one lump sum, set repayments, usually priced as a yearly rate, and our Funding Circle entry covers that route. Our Capital on Tap entry covers card-style borrowing for smaller everyday spending. iwoca works if speed and flexibility matter more than the headline price, and less well if a balance will sit untouched for a year.

Put iwoca side by side with another lender →

Common questions

Regulation and status

iwoca Ltd is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (reference number: 791804). Its business lending is unregulated commercial lending, so these loans are not FCA-regulated products.

iwoca runs a partner programme that pays referral commission (it also powers Teya's Flexi Loan). FundSpeed may join it, and that never changes what we write. Facts checked on 7 September 2026 against the sources below. Spotted a change? Tell us and we will fix it.

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