iwoca vs Capify: Which Business Loan Is Right for You?

iwoca and Capify both offer fast, accessible unsecured business finance to SMEs who need capital quickly and cannot wait for a bank decision. The structural difference is significant: iwoca uses daily-accruing interest on a revolving facility — you pay only for days used, early repayment reduces cost directly, and the pricing is transparent. Capify uses a factor rate on short-term products — you agree a fixed total repayment upfront, early repayment does not reduce that cost, and fees are layered on top. For most businesses with a choice between the two, iwoca will be the lower-cost and more flexible option. Capify’s distinctive position is its Merchant Cash Advance (MCA) product, which suits businesses with high card transaction volumes where repayment is linked to sales rather than a fixed monthly date.

Perspective note. This comparison was written by the BusinessExpert team based on published product information from both lenders. We may earn referral fees from some lenders, which does not affect editorial assessment. Both are evaluated against the same criteria.

iwoca vs Capify at a Glance

• iwoca offers unsecured revolving credit (Flexi-Loan) from £1,000 to £1,000,000. Daily interest. Representative APR 49%. No fees on terms up to 12 months. Start-ups and newer businesses accepted with capped limits.
• Capify offers unsecured loans from £5,000 to £1,000,000 and a Merchant Cash Advance from £5,000 to £750,000. Uses factor rates; representative APRs 47.9%–67.89%. Upfront fees: 4% origination, £249–£749 processing, plus £24.90/month service fee.
• Both require Limited Company, LLP, or sole trader structure. iwoca excludes sole traders from core products. Capify accepts a wider range of business structures.
• Both can fund within 24–48 hours.
• iwoca’s early repayment saves money — interest stops accruing immediately. Capify’s factor rate products do not reduce cost on early repayment.

The Core Difference Between iwoca and Capify

iwoca’s Flexi-Loan is a revolving credit facility with daily interest. When you draw down funds, interest accrues each day on the outstanding balance. Repay early and interest stops — the total cost is exactly what you used, for exactly how long you held it. The fee structure is clean: no arrangement fee for terms up to 12 months, a 5% drawdown fee for 13–24 months, and 6% for longer terms.

Capify’s standard unsecured loan uses a factor rate rather than an interest rate. A factor rate of 1.3, for example, means you agree upfront to repay £130,000 on a £100,000 loan — regardless of how quickly you repay. Paying back in month 4 instead of month 12 does not reduce the £130,000 owed. This is a meaningful distinction: Capify’s cost is fixed at the point of agreement, not variable with the repayment timeline. In addition, Capify charges an origination fee of 4%, a tiered processing fee (£249–£749), and a monthly service fee of £24.90 — these layer on top of the factor cost.

The MCA is Capify’s differentiated product. Rather than fixed monthly repayments, the MCA collects a percentage of daily or weekly card sales until the agreed total is repaid. For businesses with high and variable card transaction volumes — retail, hospitality, salons, gyms — this links repayment to actual revenue rather than a fixed date. In a slow month, less is collected; in a busy month, the balance clears faster. iwoca does not offer a comparable product.

iwoca vs Capify Compared

Rates, fees, and eligibility criteria are from published sources as of April 2026 and are subject to change. Verify current terms at iwoca.co.uk and capify.co.uk before applying.

Differences That Actually Matter

Factor rate vs daily interest: the repayment timing problem. If you take a Capify loan with a factor rate of 1.35, you will repay £135,000 on a £100,000 advance — whether you repay in 6 months or 18. Paying early feels virtuous but does not reduce the cost. With iwoca, paying 3 months early on a 12-month facility saves 3 months of interest. For businesses that expect to repay ahead of schedule — perhaps from a large customer payment or a seasonal revenue spike — this distinction is financially material, not cosmetic.

Fee structure: simple vs layered. iwoca’s fee structure for short-term borrowing is genuinely minimal — no arrangement fee, no processing fee, no monthly service charge for terms up to 12 months. Capify’s fee structure layers multiple charges before the interest equivalent. The 4% origination fee on £100,000 is £4,000 at drawdown. The processing fee adds up to another £749. The monthly service fee adds £24.90 per month for the duration. For very short-term borrowing, these fees compress the cost advantage of a lower factor rate quickly.

Merchant Cash Advance: Capify’s distinctive offer. If your business takes a significant proportion of revenue via card payments — hospitality, retail, services with card-heavy customers — Capify’s MCA product links repayment to actual sales. On a slow week, less is collected. On a busy week, more is taken and the balance clears faster. This flexibility has real value for seasonal businesses or those with lumpy revenue. iwoca does not offer an MCA; its revolving facility has fixed minimum monthly repayments collected by direct debit regardless of revenue.

Sole trader access. Capify accepts sole traders, limited companies, and partnerships. iwoca’s core Flexi-Loan requires Limited Company or LLP structure — sole traders are excluded. For unincorporated businesses, Capify opens a route that iwoca does not.

Pricing and Cost Comparison

For a £30,000 advance held for 6 months:

• iwoca: No arrangement fee (under 12 months). At representative pricing (49% APR ≈ 3.33% per 30 days), interest over 6 months on reducing balance is roughly £4,500–£5,000. If repaid in 4 months, the interest stops — total cost falls to roughly £3,000–£3,500.
• Capify: Factor rate examples disclosed by Capify indicate representative APRs of 47.9%–67.89%. At 67.89% APR on £30,000 held for 6 months, the interest-equivalent cost is roughly £10,000 (illustrative — factor rate products fix the total repayment at drawdown, so this is an approximation of the all-in cost, not a direct factor rate calculation). Add 4% origination (£1,200), processing fee (up to £749), and 6 × £24.90 service fee (£149) — total additional fees ~£2,100. If you repay early, Capify does not add a penalty, but the agreed total repayment amount does not reduce either.

The comparison favours iwoca for straightforward short-term borrowing. Capify’s MCA may present better economics for card-heavy businesses where revenue volatility makes fixed monthly repayments difficult to commit to. Always calculate total repayment — not just the headline rate — before comparing.

Application and Workflow

Both lenders use open banking. iwoca’s application takes approximately 5 minutes; connecting a business bank account allows automated assessment without manual document uploads in most cases. Decisions arrive within 24 hours, often within hours. Funds transfer within hours of approval.

Capify’s process is also fast. UK-based applicants complete an online application with basic business details and bank statement upload. Decisions typically arrive within 24 hours; funding within 24–48 hours. For MCA products, Capify will also review card processing statements to assess MCA eligibility and size the advance appropriately.

Which Should You Choose?

• If you are a Limited Company or LLP and want a clean, transparent short-term facility — with early repayment saving you money — iwoca is the stronger default choice.
• If your business takes high card transaction volumes and you want repayment linked to actual sales rather than a fixed monthly date, Capify’s MCA is a product category iwoca does not match.
• If you are a sole trader, Capify accepts your structure where iwoca’s core product does not.
• If you are comparing total costs, model both for your specific amount, likely draw-down period, and probability of early repayment — factor rate products often look cheaper until fees and the no-early-repayment-benefit dynamic are accounted for.
• For businesses that expect to hold the full amount for the agreed term without early repayment, the gap between the two narrows. For businesses that might repay in months 3 or 4 of a 12-month term, iwoca’s daily-interest structure is materially cheaper.

iwoca vs Capify: Quick Answer

iwoca offers a revolving Flexi-Loan with daily interest (representative APR 49%) and no fees on terms up to 12 months — early repayment saves money directly. Capify offers loans and Merchant Cash Advances using factor rates (representative APR 47.9%–67.89%) with layered fees; early repayment does not reduce the fixed total. For most Limited Company borrowers, iwoca is more transparent and lower-cost short-term. Capify’s MCA suits card-heavy businesses wanting repayment linked to sales, and accepts sole traders where iwoca does not.

Frequently Asked Questions

• What is a Merchant Cash Advance and how is it different from a business loan?

  A Merchant Cash Advance (MCA) is an advance against future card sales. Instead of fixed monthly repayments, the lender collects a percentage of your daily or weekly card transactions until the agreed total is repaid. Repayment is faster in busy periods and slower in quiet ones. It is not a loan in the conventional sense — there is no fixed term, and the cost is expressed as a factor rate rather than an interest rate. Capify offers MCAs; iwoca does not.

• Does Capify charge early repayment fees?

  Capify does not charge early repayment penalties. However, factor rate products are structured so that the total repayment amount is fixed at the point of agreement — repaying early does not reduce that total. You avoid future collections, but the agreed amount still applies. This is different from interest-based products where early repayment saves on future interest accrual.

• Can a sole trader use iwoca or Capify?

  Capify accepts sole traders, limited companies, and partnerships. iwoca’s core Flexi-Loan requires Limited Company or LLP structure — sole traders are currently excluded from the main product. Sole traders seeking fast unsecured finance should check Capify’s current eligibility criteria or look at specialist sole trader lending platforms.

• How much can I borrow from iwoca or Capify?

  iwoca’s Flexi-Loan maximum is £1,000,000, though larger limits are typically available to businesses with significant turnover and track record. Capify’s unsecured loan maximum is £1,000,000 (up to £3,000,000 for secured). The MCA maximum is £750,000. Actual limits depend on your trading history, revenue, credit profile, and the lender’s current risk appetite. Verify current maximums directly with each lender.

• Is iwoca or Capify regulated by the FCA?

  iwoca Ltd is registered with the FCA under the Payment Services Regulations (FRN 791804). Commercial lending to businesses is largely outside FCA regulation, so neither lender’s business loans are FCA-regulated credit agreements in the consumer sense. Neither is covered by FSCS. Always verify current regulatory status directly with the lender before applying.

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