Funding Circle vs iwoca: Business Loans Compared

Funding Circle vs iwoca: Quick Verdict

Choosing between these two, you’re really choosing between the lowest rate and the most flexibility.

Funding Circle is the cheaper lender for a planned, fixed-term loan. iwoca is the flexible one: a Flexi-Loan you draw, repay and redraw, paying interest only for the days you hold the money. We verified both on each lender’s own pages in June 2026.

• Best overall: Funding Circle for planned borrowing, iwoca for lumpy cash flow. There’s no single winner; it depends on the job.
• Best for fast funding: iwoca, with a decision in as little as 24 hours.
• Best for larger loans: iwoca, whose limit reaches £1,000,000 against Funding Circle’s £750,000.
• Best for lower rates: Funding Circle, from 6.9% a year fixed.
• Best for a thinner trading history: iwoca, which reads live account data and sets no fixed trading-history minimum.
• Main reason to choose Funding Circle: the lowest rate on a planned loan, with a fixed monthly cost you know on day one.
• Main reason to choose iwoca: you pay interest only for the days you borrow, and can draw and redraw without reapplying.

Both lend only to limited companies and LLPs, so neither is an option if you trade as a sole trader. That’s the first filter.

Funding Circle and iwoca Compared

We verified every rate, limit and rule below on each lender’s own pages in June 2026. The core difference is structure: Funding Circle is a fixed-rate term loan for planned investment; iwoca is a revolving credit line for cash-flow gaps.

Funding Circle vs iwoca: Rates and Fees

On the headline, Funding Circle wins: from 6.9% a year against iwoca’s 49% representative APR. But the two prices answer different questions, so read past the headline.

Total cost example, Funding Circle. Its representative example on a £100,000 loan puts the completion fee at 6.9% (£6,900) plus £8,668 interest, for £115,568 repaid in total. The completion fee is the catch most borrowers miss.

Total cost example, iwoca. Take £10,000 at its representative rate and hold it a year and you would repay £12,294. Clear it in a month, the week a late invoice lands, and you pay a single month’s interest.

So run it both ways. For a large sum held to term, Funding Circle’s low rate usually costs far less. For a smaller sum you’ll repay fast, iwoca’s pay-for-days-used model can come out cheaper despite the higher APR.

We’d model your real repayment timeline before choosing: how long you hold the money decides what it costs you, not the headline rate.

Funding Circle vs iwoca: Eligibility and Approval Speed

Both move fast but feel different. iwoca checks eligibility with a soft search that will not dent your credit score, connects Open Banking, and can decide inside 24 hours.

Funding Circle takes about seven minutes to apply, returns a decision in as little as an hour, and funds typically within 48. It reads your filed accounts, so clean books and a year of solid trading help your case.

You will need the usual from both: a UK business bank account, recent figures, and a director’s personal guarantee. Neither loan is covered by the FSCS.

Funding Circle vs iwoca: Loan Features

With Funding Circle you borrow a set amount, get a fixed rate, and repay the same figure every month for up to six years. You know the total cost on day one, which suits equipment, a fit-out, or any spend you pay down steadily.

With iwoca you’re approved for a limit, then draw what you need, repay early whenever cash allows, and pay interest only for the days the money is out. That suits bridging a slow quarter, covering a VAT bill, or topping up stock before a busy period.

We rate the split simply: term loan for planned spend, Flexi-Loan for unpredictable gaps.

Which Lender Should You Choose?

Think about how the money moves through your year. If you’ll hold a set sum and repay it steadily, Funding Circle’s rate compounds in your favour. If you borrow to bridge a gap and clear it the moment an invoice lands, iwoca fits far better.

We wouldn’t pay iwoca’s APR for money we planned to hold for years. We wouldn’t lock a short cash-flow gap into a five-year Funding Circle loan either. Match the product to the job.

Choose Funding Circle If

• You’re funding a planned, fixed-term investment: new equipment, a fit-out, a hire-and-grow push.
• You want the lowest rate and a fixed monthly cost you know from day one.
• You need a larger planned sum, up to £750,000 over up to six years.
• You’re an established limited company or LLP with at least a year of trading and clean accounts.

Choose iwoca If

• Your cash flow is lumpy and you’d rather draw and repay than carry a fixed loan.
• You need a yes this week and can move on an Open Banking decision in 24 hours.
• You’ll repay quickly, so paying interest only for the days you borrow works in your favour.
• Your trading history is thinner; iwoca reads live account data rather than a fixed minimum.

Alternatives to Funding Circle and iwoca

Tide Funding Options. A soft-search marketplace that matches you to lenders across term loans and flexible credit in one enquiry. Best when you would rather compare the whole market than apply to one lender. It spares your file a string of hard searches.

Fleximize. An FCA-regulated lender that, unlike these two, will consider sole traders and partnerships, with no early-repayment penalty. Best if you are unincorporated or want a regulated term loan.

British Business Bank Start Up Loans. Government-backed personal loans for the business at a fixed 7.5%, with no security and free mentoring. Best for newer or unincorporated businesses that Funding Circle and iwoca turn away.

Frequently Asked Questions